Income-Driven Repayment Plans: Questions And Answers - Federal Student Aid, U.s. Department Of Education Page 14
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26employment), you can submit updated information and ask your servicer to recalculate your payment
amount at any time. To do this, submit a new application for an income-driven repayment plan. When
asked to select the reason for submitting the application, respond that you are submitting documentation
early because you want your servicer to recalculate your payment immediately.
20. If I’m repaying under PAYE or IBR, what happens if my income increases so much that I
no longer qualify to make payments based on income? Do I then lose eligibility to repay
under PAYE or IBR?
No. If your income increases to the point that your calculated PAYE or IBR payment amount is more than
the monthly amount you would be required to repay under a 10-year Standard Repayment Plan, you will
remain on the PAYE or IBR plan, but your monthly payment will no longer be based on your income.
Instead, you will pay the amount you would have been required to pay under a 10-year Standard
Repayment Plan. This 10-year Standard Repayment Plan monthly payment amount will be calculated
based on the amount of your eligible loans that were outstanding when you first began repayment under
the PAYE or IBR plan.
Although your required monthly payment will be the 10-year Standard Repayment Plan amount (as
described above), you will continue repaying your loans under the PAYE or IBR plan, and your maximum
repayment period will remain at 20 or 25 years.
21. If I’m repaying under the PAYE or IBR plan and my income increases so that I no longer
qualify to make payments based on income, but I stay in the plan and make the 10-year
Standard Repayment Plan amount, is it still possible for me to receive loan forgiveness
after 20 or 25 years?
Making payments under the PAYE or IBR plan that are not based on income does not disqualify you from
receiving loan forgiveness. As long as you remain on the PAYE or IBR plan and you meet the other
requirements for loan forgiveness, you will qualify for forgiveness of any loan balance that remains at the
end of the 20- or 25-year period. However, if your income remains high and you continue to make the 10-
year Standard Repayment Plan payment amount, your loans may be repaid in full before the end of the
repayment period.
22. If my loan servicer determines that I no longer qualify to make PAYE or IBR plan
payments based on my income and I am paying a 10-year Standard Repayment Plan
amount, what happens if my income decreases?
During any period when your monthly payment amount is not based on your income, you still have the
option of recertifying your income and family size. If you recertify and your income or family size has
changed so that your calculated PAYE or IBR payment would once again be less than the 10-year
Standard Repayment Plan amount, your servicer will recalculate your payment and you'll return to making
payments that are based on your income.
23. Do Social Security disability payments count as income for purposes of the income-
driven repayment plans?
Social Security disability payments would be counted as income only if they are treated as taxable
income and are included as part of your AGI on your federal tax return, in accordance with IRS
requirements.
Federal Student Aid |
StudentAid.gov
Page 14 of 26
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