Income-Driven Repayment refers to federal student loan repayment plans that adjust your monthly payment based on your income, family size, and where you live. These plans aim to keep payments manageable for borrowers.
While your state of residence generally won’t impact your monthly payments, there are exceptions. If you’re residing in Alaska or Hawaii, your payments may be adjusted to account for the higher cost of living.
Can you be denied income-driven repayment?
Yes, you can be denied access to income-driven repayment plans. The reason? Not having a partial financial hardship. This is a requirement for certain plans, such as Income-Based Repayment (IBR) and Pay As You Earn (PAYE) plans.
Who’s most likely to face denial? Borrowers with high incomes and small families could struggle to qualify.
But remember, there are alternatives. The Revised Pay As You Earn (REPAYE) and Income-Contingent Repayment (ICR) Plans are still available even if you don’t meet hardship criteria.
Can you qualify for loan forgiveness under an IDR Plan?
Absolutely, loan forgiveness is an option under an Income-Driven Repayment (IDR) plan. Here’s how it works: after making payments for 20 to 25 years, borrowers become eligible for IDR loan forgiveness.
But the timeline can vary. If your loans stem from graduate school, expect to reach forgiveness after 25 years or 300 qualifying payments. For those who borrowed only for undergraduate studies, forgiveness comes a bit sooner, after 20 years, or 240 payments.
Learn More: Who Do You Contact If You Have Questions About Repayment Plans?