Income-Driven Repayment Plan Request Form - U.s. Department Of Education Page 6
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10SECTION 10: ELIGIBILITY REQUIREMENTS
required to pay any monthly accrued interest that
INFORMATION ABOUT THE IBR AND PAY AS YOU EARN
exceeds your monthly payment amount for a
PLANS:
maximum of three consecutive years from the date
To initially qualify to repay your loan under the IBR or
that you start repaying your loans under the IBR or Pay
Pay As You Earn plan and to continue to qualify to
As You Earn plan. The three-year consecutive period
make payments based on your income, you must have
limit does not include any period during which you
a partial financial hardship (as defined in Section 9). If
receive an economic hardship deferment. On
you are married and file a joint federal income tax
unsubsidized loans, all accruing interest is your
return, your loan holder will also take your spouse’s
responsibility.
income and eligible loans into account when
If you are determined to no longer have a partial
determining whether you have a partial financial
financial hardship or you leave the IBR or Pay As You
hardship.
Earn plan, any unpaid interest will be capitalized
For the Pay As You Earn plan, you must be a new
(added to your principal balance). However, if you are
borrower as defined in Section 9.
in the Pay As You Earn plan and are determined to no
longer have a partial financial hardship, the amount
Although the Pay As You Earn plan is available only for
that is capitalized is limited to 10% of the outstanding
Direct Loan Program loans, the Department will take
principal balance on your loans at the time that you
any FFEL Program loans that you have into account
entered the Pay As You Earn plan.
when determining whether you have a partial financial
hardship except for: (1) a FFEL Program loan that is in
If you leave the IBR plan, you will be placed on the
default, (2) a Federal PLUS Loan made to a parent
standard repayment plan and your monthly payment
borrower, or (3) a Federal Consolidation Loan that
amount will be calculated based on the outstanding
repaid a Federal or Direct PLUS Loan made to a parent
balance of your eligible loans at the time you leave the
borrower.
IBR plan and the repayment period remaining for your
loans. If you wish to repay your loans under a different
After entry into the IBR or Pay As You Earn plan, you
repayment plan, you must first make one payment
must annually certify your family size and provide
under the standard repayment plan or make a reduced
income documentation for determination of whether
payment under a forbearance agreement with your
you continue to have a partial financial hardship. Your
loan holder while you are on the standard repayment
loan holder will notify you of the deadline by which
plan.
you must provide this documentation. Your monthly
payment amount may be adjusted annually. The new
If you leave the Pay As You Earn Plan, you may change
payment amount may be higher or lower, depending
to any other repayment plan for which you qualify.
on the income documentation and family size
information you provide each year.
Under the IBR and Pay As You Earn plans, if your loan
is not repaid in full after you have made the equivalent
If you do not provide updated income documentation
of 20 years (for the Pay As You Earn plan and for new
annually, within 10 days of the deadline provided by
borrowers under the IBR plan) or 25 years (for all
your loan holder, after requested to do so by your loan
other borrowers under the IBR plan) of qualifying
holder, your payment amount will be the 10-year
monthly payments and that many years have elapsed,
standard payment amount calculated at the time that
any remaining debt will be forgiven. If you receive an
you initially entered the IBR or Pay As You Earn plan
economic hardship deferment, any months of
and any outstanding interest will be capitalized (added
economic hardship deferment are considered the
to your principal balance).
equivalent of qualifying payments. Months for which
You will never pay more per month under the IBR or
you receive any other type of deferment or months of
Pay As You Earn plan than you would on the 10-year
forbearance are not counted as qualifying payments,
standard repayment plan, based upon the amount
and do not count toward the 20- or 25-year
owed on your eligible loans at the time you initially
forgiveness period. Any amount forgiven under the IBR
entered the IBR or Pay As You Earn plan.
plan or Pay As You Earn plan may be considered
income by the Internal Revenue Service and subject to
Under the IBR or Pay As You Earn plan, your monthly
federal income tax.
payment may be less than the monthly accruing
interest. On subsidized loans, you are not
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