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Student loan: When are they forgiven with income based repayment plans?

Those with federal student loans have the option of using income based repayment plans, but what does that mean for student loan forgiveness?

student loan debt sticker on cash representing student loan debt

This type of plan will help those that are working and have a lower income than they due student loan debt.

The majority of federal student aid is eligible for income based repayment.

If you feel your income is lower than your debt then one of these income driven repayment plans may be fitting for you.


Nurses and loan forgiveness

There are 4 different student loan repayment plans based on income

  • Revised Pay As You Earn Repayment Plan, or REPAYE Plan
  • Pay As You Earn Repayment Plan, or PAYE Plan
  • Income-Based Repayment Plan, or IBR Plan
  • Income-Contingent Repayment Plan, or ICR Plan
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What is the best loan option?

Depending on which plan you choose it determines what your payment will be.

With income based plans it takes a percentage of your income to pay off the loan.

If you have a low income and large family, you might end up without a payment.


Student loan: Do you qualify for Navient settlement?

The following student loan repayment plans take these percentages of your income

  • REPAYE plan: 10% for 20-25 years
  • PAYE plan: 10% but not more than the 10 year Standard Repayment Plan amount for 20 years
  • IBR plan: 10% if you’re a new borrower after July 1, 2014 and never more than the 10 year Standard Repayment Plan amount. If you aren’t a new borrower it’s 15%. The plan is 20-25 years.
  • ICR plan: 20% or what you would pay with a fixed payment over a 12 year span for 25 years.

If your loans aren’t paid off by the end of your payment plan the remaining amount is forgiven.

This depends on if and when your income rises and how much your income is in comparison to your debt.

If you’re using this type of repayment plan and also apply for the Public Service Loan Forgiveness Program, you may be forgiven after ten years instead of 20-25 years.

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