1. Repayment Loan Options

2. Agenda Income-Driven Repayment Plans Overview Other Repayment Plans
Pay As You Earn Plan
Income-Based Repayment Plan
Income-Contingent Repayment Plan
Income Sensitive Repayment Plan
Other Repayment Plans
Standard
Graduated
Extended (fixed or graduated)
Resources

3. Income-Driven Plans Overview
For more details on eligibility, go to
Pay As You Earn
IBR
ICR
Payment Calculation
10% of discretionary income
Discretionary income = The difference between the borrower’s AGI and 150% of the poverty guideline for their family size and state.
15% of discretionary income
20% of discretionary income
Discretionary income = The difference between the borrower’s AGI and 100% of the poverty guideline for their family size and state.
Who Qualifies
New Borrowers as of 10/1/07; and,
Obtains a new Direct Loan disbursement on/after 10/1/11.
Partial Financial Hardship (PFH)
Direct Loan borrowers
Eligible Loans
Direct Subsidized and Unsubsidized Loans
Direct PLUS Loans made to graduate or professional students, and
Direct Consolidation Loans that did not repay a FFELP or Direct Parent PLUS Loan
Direct and FFELP Subsidized and Unsubsidized Loans
Direct and FFELP PLUS Loans made to graduate or professional students, and
Direct and FFELP Consolidation Loans that did not repay a FFELP or Direct Parent PLUS Loan
Direct Consolidation Loans that repaid a FFELP or Direct Parent PLUS Loan (disbursed on/after 7/1/06 )
Interest Subsidy Benefit
If the monthly Pay As You Earn payment amount does not cover the interest that accrues on the loans each month, the government will pay the unpaid accrued interest on the borrower’s Direct Subsidized Stafford Loans for up to three consecutive years from the date they began repaying under Pay As You Earn.
If the monthly IBR payment amount does not cover the interest that accrues on the loans each month, the government will pay the unpaid accrued interest on the borrower’s Subsidized Stafford Loans (either Direct Loan or FFEL Loans) for up to three consecutive years from the date they began repaying under IBR .
The amount capitalized will not exceed 10% of original amount owed when the borrower entered repayment
Forgiveness
20 Years
25 Years
Pay as you earn – newest payment plan – Direct Loans only and new borrowers as of 10/1/07. Students who have previous loans or consolidation loans don’t qualify.
Income Based Repayment Program Includes previous loans from different lenders in the (Federal Family Education Loan Program – FFELP)
Payments based on 15% discretionary income
Income Contingent Repayment plan –
20% discretionary income
No Partial Financial Hardship requirement
No more than 10% capitalized
Go to to see if you qualify.
Partial Financial Hardship is if the IBR or Pay as You Earn calculated payment amount is less then the 10 year standard payment amount.
Go to page 2 of the IBR handout and go over the examples.

4. Poverty Guidelines
The following chart contains information from the Department of Health and Human Services (HHS). To determine your family size, count your children if they receive more than half their support from you, and count other persons if they live with you as well as receive more than half their support from you currently and for the foreseeable future. Support includes money, gifts, loans, housing, food, clothes, car, medical and dental care, payment of college costs, and so on.
Next, find the column that represents your place of residence. Read down to your family size. This is the poverty guideline for you.
Family size 48 Contiguous states and D.C. Alaska Hawaii
1 11, , ,860
2 15, , ,410
3 19, , ,960
4 23, , ,510
5 27, , ,060
6 30, , ,610
7 34, , ,160
8 38, , ,710
For each additional person, add 3,960 4,950 4,550
Last updated February 22, 2013

5. An Example of Calculating Payments
1 Person = $11,170 Poverty Guidelines
150% of $11,170 = $16,755
$60,000 Adjusted Gross Income - $16,755 = $43,245 (discretionary income)
$43,245 x 10% for Pay As You Earn Program (PAYE) divided by 12 months would be $ payment in PAYE
$43,245 x15% for Income Based Repayment Program divided by 12 months would be $ payment in IBR
Standard Payment for $100K Loan debt is around $1200 a month.

6. Income-Driven Plan Payment Comparison
Family Size 1 2 3 4 5 6
$15,000
IBR
$0.00
ICR
$64.00
Pay As You Earn
$20,000
$41.00
$147.00
$81.00
$15.00
$27.00
$25,000
$103.00
$29.00
$184.00
$165.00
$99.00
$33.00
$69.00
$19.00
$30,000
$166.00
$91.00
$17.00
$204.00
$193.00
$182.00
$116.00
$50.00
$110.00
$61.00
$11.00
$35,000
$228.00
$154.00
$80.00
$10.00
$221.00
$212.00
$199.00
$133.00
$67.00
$152.00
$53.00
$40,000
$291.00
$216.00
$142.00
$68.00
$235.00
$232.00
$217.00
$151.00
$194.00
$144.00
$95.00
$45.00
$45,000
No-PFH
$279.00
$205.00
$130.00
$56.00
$249.00
$248.00
$234.00
$186.00
$136.00
$87.00
$37.00
$50,000
$267.00
$119.00
$44.00
$264.00
$277.00
$178.00
$129.00
$79.00
$30.00
This chart is based on the charts shown on pages and of the Federal Register issued on November 1, 2012 which published the final regulations.
This chart assumes an loan debt of $26,000 and an interest rate of 6.80%.

7. Pay As You Earn Under Pay As You Earn, borrowers pay the lesser of:
10% of discretionary income or what they would have paid under the 10-year Standard repayment plan.
Discretionary income for this plan is the difference between the borrower’s AGI and 150 percent of the poverty guideline amount for his/her state of residence and family size.
Interest subsidy benefit
If the monthly Pay As You Earn payment amount does not cover the interest that accrues on the loans each month, the government will pay the unpaid accrued interest on the borrower’s Direct Subsidized Stafford Loans for up to three consecutive years from the date they began repaying under Pay As You Earn or IBR.
The three years does not include periods of Economic Hardship Deferment
Borrower must pay all interest on unsubsidized loans
For Pay As You Earn, the remaining balance is forgiven after 20 years of qualifying repayment
Pay As You Earn - Capitalization
•No longer qualifies for payments based on income (no longer has a partial financial hardship) or
•Leaves Pay As You Earn entirely
•Interest capitalizes only until principal balance is 10% greater than original principal amount when borrower entered plan

8. Income-Based Repayment (IBR)
Under IBR, borrowers pay the lesser of:
15% of discretionary income or what they would have paid under the 10-year Standard repayment plan
Discretionary income for this plan is the difference between the borrower’s Adjusted Gross Income (AGI) and 150 percent of the poverty guideline amount for his/her state of residence and family size.
Interest subsidy benefit
If the monthly IBR payment amount does not cover the interest that accrues on the loans each month, the government will pay the unpaid accrued interest on the borrower’s Subsidized Stafford Loans (either Direct Loan or FFEL Loans) for up to three consecutive years from the date they began repaying under IBR or Pay As You Earn.
The three years does not include periods of Economic Hardship Deferment
Borrower must pay all interest on unsubsidized loans
25 year loan forgiveness
If the borrower makes 25 years of qualifying payments and meets certain other requirements, any remaining balance will be cancelled

9. IBR Payment Amounts
The IBR Partial Financial Hardship (PFH) payment amount is determined by the AGI and family size
If the borrower is married and files a joint federal tax return, the AGI includes both spouse’s incomes together
If the spouse has eligible student loan debt, this debt may also be taken into consideration when determining whether the borrower has a PFH
Annual IBR repayment amount is 15% of the difference between the borrower’s AGI and 150% of the Department of Health and Human Services Poverty Guideline for their family size and state
Divide this amount by 12 to get the monthly IBR payment amount
The IBR payment amount will be adjusted yearly based on income and family size but will never be more than what would be required to be paid under a 10-year Standard Plan based on the balance of the eligible loans when the borrower began repayment under the IBR plan

10. Leaving IBR
If borrowers leave IBR and have unpaid interest, it will capitalize to principal, increasing principle balance
The borrower is placed into the Standard Plan based on the term remaining for their loan type
For example, Stafford/PLUS Loans will have 10 years minus the time in repayment. Consolidation Loans may have years minus the time in repayment.
Borrowers may request a reduced payment forbearance if they cannot afford the payment amount on the standard repayment plan.
Borrowers who leave IBR can come back if they demonstrate "partial financial hardship".

11. Income-Contingent Repayment (ICR)
Each year the monthly payments are recalculated based on:
AGI (includes spouse’s income if married)
The spouse’s income will only be included if they file federal taxes jointly or are repaying under joint ICR
Family size
Total amount of the borrower’s Direct Loans
If payments are not large enough to cover the interest that accrues monthly, the unpaid interest is capitalized once each year
The amount capitalized will not exceed 10% of original amount owed when the borrower entered repayment
If the borrower’s payments are not enough to cover the accruing interest, it will continue to accrue but will not be capitalized if the borrower has reached the 10% limit
After 25 years, the remaining balance will be discharged

12. Income-Driven Repayment Examples
Eligible Loan Debt - $31, (6.8% interest rate/unsubsidized)
Starting AGI - $25,000
(AGI increasing 4% annually, Poverty Level Change Rate 3%)
Family Size = 1
Pay As You Earn Repayment Plan
(20 years)
Income Based Repayment Plan
(IBR)
 (25 years)
Income Contingent Repayment Plan
(ICR)
(25 years) 
Standard Repayment Plan
(10 years)
First Monthly Payment
$68.71
$103.06
$229.54
$356.75
Maximum Monthly Payment
$194.09
$256.84
N/A
Total Interest Paid
$29,080.78
$41,593.20
$26,348.39
$11,809.83
Total Principal Paid
$343.11
$22,723.65
$31,000.00
Total Amount Paid
$29,423.88
$64,316.85
$57,348.39
$42,809.83
Remaining Principal Balance and Unpaid Interest
$30,656.89
$13,145.04
$0.00
Total Loan Forgiveness
$43,718.25
Examples from FinAid.org calculators

13. Married Filing Jointly Example
For the purposes of this example, the borrower’s AGI = $25,000 and the spouse’s AGI =$30,000. The spouse has no loan debt.
Eligible Loan Debt - $50,000 (6.8% interest rate/unsubsidized)
Starting AGI - $55,000
(AGI increasing 4% annually, Poverty Level Change Rate 3%)
Family Size = 2/Married Filing Jointly
Pay As You Earn Repayment Plan
(19.8 years)
Income Based Repayment Plan
(IBR)
(12.5 years)
Income Contingent Repayment Plan
(ICR)
(11.8 years)
Standard Repayment Plan
(10 Years)
First Monthly Payment
$269.21
$403.81
$510.86
$575.40
Maximum Monthly Payment
$529.77
Total Interest Paid
$49,470.58
$26,433.15
$23,235.20
$19,048.28
Total Principal Paid
$50,187.09
$50,000.00
Total Amount Paid
$99,470.58
$76,433.15
$73,235.20
$69,048.28
Remaining Principal Balance and Unpaid Interest
$0.00
Total Loan Forgiveness
Pay as you earn will take longer – therefore not the best choice here
No loan forgiveness because your loans are paid off before the 20 or 25 years
Examples from FinAid.org calculators

14. Married Filing Separately Example
For the purposes of this example, the borrower’s AGI = $25,000 and the spouse’s AGI =$30,000. The spouse has no loan debt.
Eligible Loan Debt - $50,000 (6.8% interest rate/unsubsidized)
Starting AGI - $25,000
(AGI increasing 4% annually, Poverty Level Change Rate 3%)
Family Size = 2/Married Filing Separately
Pay As You Earn Repayment Plan
( 20 years)
Income Based Repayment Plan
(IBR)
(25 years)
Income Contingent Repayment Plan
(ICR)
Standard Repayment Plan
(10 Years)
First Monthly Payment
$19.21
$28.81
$173.83
$575.40
Maximum Monthly Payment
$107.30
$224.35
$402.48
Total Interest Paid
$13,462.88
$32,055.71
$$82,332.03
$19,048.28
Total Principal Paid
$0.00
$10,446.97
$50,000.00
Total Amount Paid
$$92,779.00
$69,048.28
Remaining Principal Balance and Unpaid Interest
$104,537.12
$102,944.29
$56,109.37
Total Loan Forgiveness
Makes sense if your spouse doesn’t have loan debt it might save money to file separately and do one of these programs.
Examples from FinAid.org calculators

15. Electronic Application – IRS Interface
Launched in September
The eApplication is now available for IBR, ICR, Pay As You Earn or Lowest payment
Can be used by borrowers with Direct Loans or FFEL Loans
Hosted on StudentLoans.gov. Borrowers can access application directly or through loan servicers’ websites
Uses IRS Data Retrieval Tool that is used on the FAFSA
Retrieves the most recent tax information from two most recently completed tax years
Electronically transmits application to loan servicer—no follow-up necessary unless AGI is unavailable or borrower wants to submit alternative documentation of income
Can be used for initial applications or annual recertification

16. Electronic Application – Review

17. Electronic Application - Confirmation

18. Income-Driven Repayment Application
Apply on loan servicer’s website
Eligible to apply 60 days prior to repayment start date
Borrower is notified by servicer 90 days prior to renewal date
A ‘lowest eligible repayment option’ is available to borrowers unsure of which plan to select.
If using alternative documentation of income, supporting documents, such as pay stubs, must clearly show how often (and how much) income is received.
Documentation of income and family size must be submitted annually
Option to complete application electronically and transfer prior year tax data from the Internal Revenue Service (IRS)
Apply for one of these programs 60 days before repayment starts. Two months before your grace period is over

19. Repayment Options – Income Sensitive
FFEL loans only
Monthly payment is based on monthly gross income
Must re-apply annually
Available for 5 years (The borrower will repay remaining balance under a Standard repayment plan unless another plan is selected.)
How to Apply
Loans serviced by FedLoan Servicing:
Complete the Income Sensitive Repayment Request Form on the Payment-Related Forms section at MyFedLoan.org/forms.
Submit documentation of your most recent total gross income from all sources (pay stubs, etc.)
Mail or fax all required forms / documentation:
FedLoan Servicing
P.O. Box 69184
Harrisburg, PA
Fax: (717)
Contact the appropriate servicer for loans not serviced by FedLoan Servicing

20. Standard Repayment Example
This is the plan the borrower will have when entering repayment, unless the borrower requests otherwise
The payment will be a fixed (equal) amount each month, although it could vary due to interest rate changes on a variable rate loan
Monthly payments will be at least $50
10-year repayment term (Standard plan for Consolidation Loans is 10 to 30 years based on balance)
Eligible Loan Debt - $31,000 (6.8% interest rate)
Standard Repayment
Months in Repayment
120
Monthly Payment
$356.75
Total Interest Payment
$11,809.83
Total Loan Payment
$42,809.83
Eligible Loan Debt - $75,000 (6.8% interest rate)
Standard Repayment
Months in Repayment
120
Monthly Payment
$863.10
Total Interest Payment
$28,572.43
Total Loan Payment
$103,572.43
FFELP - Federal Family Education Loan
Examples from FinAid.org calculators

21. Graduated Repayment Example
Eligible Loan Debt - $31,000 (6.8% interest rate)
Graduated
Months in Repayment
120
Monthly Payment
Years
1-2
3-4
5-6
7-8
9-10
$244.95
$297.80
$362.04
$440.15
$535.11
Total Interest Payment
$14,122.23
Total Loan Payment
$45,122.23
Payments start low and generally increase every two years
10-year repayment term (Consolidation Loans may have a term of 10 to 30 years based on balance)
Monthly payment is never less than the amount of interest that accrues each month
No single payment will be more than three times greater than any other payment
Eligible Loan Debt - $75,000 (6.8% interest rate)
Graduated
Months in Repayment
120
Monthly Payment
Years
1-2
3-4
5-6
7-9
9-10
$592.63
$720.49
$875.93 $
$1,294.65
Total Interest Payment
$34,166.68
Total Loan Payment
$109,166.68
Examples from FinAid.org calculators

22. Extended Repayment Example
Eligible Loan Debt - $75,000 (6.8% interest rate)
Extended
Fixed
Graduated
Months in Repayment
300
Monthly Payment
$520.55
Years
1-2
3-4
5-6
7-8
9-10
11-12
12-14
15-16
17-18
19-20
21-22
23-24 25
$425.00
$445.28
$466.53
$512.13
$536.57
$562.17
$589.00
$617.11
$677.42
$646.56
$677.56
$709.75
$743.62
Total Interest Payment
$81,165
$94,155.34
Total Loan Payment
$156,165
$169,155.34
Will pay a fixed or graduated payment amount
Repayment term not to exceed 25 years
FFEL borrowers must have more than $30,000 in outstanding FFEL Program loans (for new borrowers as of 10/07/1998)
Direct borrower must have more than $30,000 in outstanding Direct Loans (for new borrowers as of 10/07/1998)
Examples from FinAid.org calculators

23. Public Service Loan Forgiveness (PSLF) 10 years
The borrower may qualify for loan forgiveness earlier than 25 years (20 years if under Pay As You Earn) if they work full-time for a qualifying public service organization and make on-time full monthly payments under the repayment plans listed below. Payments made under these plans will count toward the 120 monthly payments that are required to receive loan forgiveness through PSLF.
10-year Standard Repayment Plan
Income Based Repayment (IBR) Plan
Income-Contingent Repayment (ICR) Plan
Pay As You Earn Plan
Any other repayment plan if the monthly payment amount is paid is not less than what would have been paid under the 10-year Standard repayment plan
For more information on PSLF, please refer to the PSLF Fact Sheet and Q&As:

24. Repayment Schedule Estimator
Repayment Schedule Estimator Fedloan Servicing - google

25. Additional Resources Repayment Schedule Estimator Repayment options
Repayment options
Repayment Calculators
Federal Student Aid (FSA) Repayment Information

26. Direct Loan Servicing Center (ACS)
Servicing Resources
Servicer
Contact Information for Borrowers
Contact Information for Schools
Phone
Website
Direct Loan Servicing Center (ACS)
myedaccount.com
FedLoan Servicing
MyFedLoan.org
MyFedLoan.org/schools
Great Lakes
mygreatlakes.org
Nelnet
nelnet.com
Sallie Mae
salliemae.com
SallieMae.com/EDServicing