If you have a low income but do not qualify for the Income-Based Repayment (IBR) Plan or the Pay As You Earn Repayment Plan, you may want to consider the Income-Contingent Repayment (ICR) Plan.

This plan is based on your adjusted gross income, family size, and the total amount of your Direct Loans.

Income-Contingent Plan

If you need to make lower Direct Loan payments, but you do not qualify for the IBR or Pay As You Earn plans, the ICR Plan may be for you.

Eligible Federal Loans
Loans That Are Not Eligible
Monthly Payments
Using the Repayment Estimator to See How Much You’d Pay Under the ICR Plan
Ten Percent Capitalization Benefit
Want to Apply for ICR?
Need Help Repaying Your Student Loans?


Eligible Federal Loans

The following loans are eligible for the ICR Plan:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans made to graduate or professional students
  • Direct Consolidation Loans (except Direct PLUS Consolidation Loans)

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Loans That Are Not Eligible

  • Federal Family Education Loan (FFEL) Program loans
  • PLUS loans made to parents, unless consolidated into a Direct Consolidation Loan on or after July 1, 2006

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Monthly Payments              

Under this plan, your monthly payments are

  • made for a maximum of 25 years;
  • based on your adjusted gross income, your family size, and the total amount of your Direct Loans; and
  • the lesser of
      1. the amount you would pay if you repaid your loan in 12 years multiplied by an income percentage factor that changes with your annual income or
      2. 20 percent of your monthly discretionary income

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Using the Repayment Estimator to See How Much You’d Pay Under the ICR Plan

Your loan servicer, the company that handles the billing and other services on your federal student loan, can help you choose a loan repayment plan that’s best for you. Before you contact your loan servicer to discuss repayment plans, you can use our Repayment Estimator to get an early look at which plans you may be eligible for and see estimates for how much you would pay monthly and overall.

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Ten Percent Capitalization Benefit

If your calculated payment amount is less than the amount of interest that accrues on your loan, the interest is capitalized (added to your principal balance) once each year until your balance is 10 percent higher than your original loan balance was when you entered repayment. Once this happens, interest continues to accrue but is not capitalized.

Note: Any interest that accrues during a deferment or forbearance does not apply to the 10 percent capitalization rule. 

Any loan amount that remains after 25 years of payments will be discharged (forgiven). You may have to pay taxes on the amount that is discharged.

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Want to Apply for ICR?

Contact your loan servicer before you apply for ICR. Your loan servicer will answer your questions about the ICR plan and help you decide whether ICR is the right plan for your situation.

If you are ready to apply for ICR, go to StudentLoans.gov, sign in, and complete the electronic Income-Based (IBR)/Pay As You Earn/Income-Contingent (ICR) Repayment Plan Request.

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Need Help Repaying Your Student Loans?

If ICR is not right for you, contact your loan servicer to discuss other repayment options. You may be able to change your repayment plan to one that will allow you to have a longer repayment period. Also ask your loan servicer about your options for a deferment or forbearance or loan consolidation.

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