Income Driven Repayment Plans
Income-Driven Repayment (IDR) plans offer relief to struggling borrowers, providing affordable monthly payments based on income and family size. IDR plans can help borrowers avoid default and qualify for forgiveness.
Benefits:
- Lower monthly payments
- Forgiveness eligibility
- Flexibility in payments
Eligibility
- Income and family size are considerations: for example if you are married but file separate then you can use your taxes so only your income is taken into consideration. However if you we’re to file or submit using your taxes. While you filed married filling jointly then the income for the whole household would then be taken into consideration. Which in turn can increase the likeliness of your payments being higher.
- PAYE Program: The pay as you earn program can give you many benefits such as: having a lower payment cap of up to 10% of your discretionary income. Not being able to be higher than 1% or an amount of a regular Standard Repayment plan.
- SAVE Program: Formally known as REPAYE (Revised Pay as you Earn) is a revitalized version of the PAYE Program with the added benefit that you can get forgiveness after 120 months of repayment if your original balance was up to $12,000 or less. The program also gives you the added benefit of an additional year for each $1,000 above those $12,000 with the final and maximum term of 240 months.
Application Process:
- You can apply directly thru http://studentaid.gov, federal lender, or let Edu Loan Plan provide you with the document preparation process.
- Proof of your income such as your taxes, pay stubs, or social security income in the case that you are receiving social security benefits.
Conclusion:
IDR plans provide essential support for students. By understanding the benefits and eligibility, borrowers can make informed decisions.
