Income-Driven Repayment Plans: Questions And Answers - Federal Student Aid, U.s. Department Of Education Page 11
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26amount of all of your Direct Loans and FFEL Program loans that are eligible for repayment under either
the PAYE Plan or the IBR Plan.
If you have both Direct Loans and FFEL Program loans, you could consolidate your FFEL Program loans
that are eligible for the IBR Plan into a Direct Consolidation Loan and then repay the consolidation loan
under the REPAYE Plan or (if you qualify) the PAYE Plan. This will give you a lower monthly payment
amount.
14. I consolidated loans I received to pay for my own education with PLUS loans that I took
out to pay for my child’s education. Can I repay the part of my consolidation loan that
repaid the loans I took out for my own education under one of the income-driven plans?
No. It isn’t possible to repay different portions of a consolidation loan under different repayment plans.
A consolidation loan that repaid a Parent PLUS Loan may not be repaid under the REPAYE Plan, the
PAYE Plan, or the IBR Plan, even if the consolidation loan also repaid one or more eligible loan types.
However, a Direct Consolidation Loan made on or after July 1, 2006, that repaid a Parent PLUS Loan
may be repaid under the ICR Plan.
15. If my loan is in default, can I repay it under an income-driven repayment plan?
No. Defaulted loans are not eligible for repayment under any of the income-driven repayment plans.
However, you may be able to remove your loan from default by making a specified number of monthly
payments in an amount that is determined using a formula similar to the IBR formula and is based on
your income. This is called “loan rehabilitation.” Once you have rehabilitated your defaulted loan, you
could then repay the loan under an income-driven plan.
As an alternative to loan rehabilitation, you may be able to consolidate your defaulted loans into a Direct
Consolidation Loan if you agree to repay the consolidation loan under an income-driven repayment plan.
Contact your loan servicer for more information about loan rehabilitation and consolidation.
Monthly Payment Amount
16. How is the monthly payment amount determined under the income-driven repayment
plans?
Under the REPAYE Plan, your monthly payment amount is always based on your income and family size.
Depending on your income, your monthly payment amount under the REPAYE Plan may be higher than
what you would be required to pay under the 10-year Standard Repayment Plan.
Under the PAYE Plan and the IBR Plan, your monthly payment amount is based on your income and
family size when you first begin repayment under the plan. However, if your income increases to the point
that your calculated monthly payment amount would be more than what you would have to pay under the
10-year Standard Repayment Plan, your monthly payment will be adjusted and will no longer be based on
your income. Instead, your required monthly payment will be the amount you would pay under the 10-
year Standard Repayment Plan, based on the loan amount you owed when you first entered the PAYE or
IBR plan. This ensures that you will never have a monthly payment that is greater than the amount you
would have to pay under the 10-year Standard Repayment Plan.
Under the ICR Plan, your monthly payment will be the lesser of an amount that is calculated based on
your income and loan debt, or an amount calculated based only on income. Depending on your income,
your monthly payment amount under the ICR Plan may be higher than what you would be required to pay
under the 10-year Standard Repayment Plan.
Federal Student Aid |
StudentAid.gov
Page 11 of 26
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