Negotiated Rulemaking for Higher Education 2015 ...
| |ICR |ORIGINAL IBR |NEW BORROWER IBR |PAY AS YOU EARN | |
|Eligible Loans |All Direct Loan types except Parent|All Direct Loan and FFEL loan types|All Direct Loan types except Parent|Same as New Borrower IBR. | |
| |PLUS and Direct PLUS Consolidation |except Parent PLUS and |PLUS and consolidation loans that | | |
| |Loans made before 07/01/2006. |consolidation loans that repaid |repaid Parent PLUS. | | |
| |Note: Direct Consolidation Loans |Parent PLUS. | | | |
| |made on/after 07/01/2006 that | | | | |
| |repaid Parent PLUS may be repaid | | | | |
| |under ICR. | | | | |
|Income Requirement to Qualify |None |Must have partial financial |Same as Original IBR. |Same as Original IBR. | |
| | |hardship (PFH) to initially qualify| | | |
| | |and to continue making payments | | | |
| | |based on income. | | | |
|PFH Definition |N/A |Annual amount due on eligible loans|Annual amount due on eligible loans|Same as New Borrower IBR. | |
| | |under10-year standard plan must |under10-year standard plan must | | |
| | |exceed 15% of discretionary income.|exceed 10% of discretionary income.| | |
|Monthly Payment[1] |Lesser of: |PFH periods: |PFH periods: |PFH periods: | |
| |20% of discretionary income, |15% of discretionary income, |10% of discretionary income, |10% of discretionary income, | |
| |divided by 12; or |divided by 12. |divided by 12. |divided by 12. | |
| |Amount repaid annually over 12 |Non-PFH periods: |Non-PFH periods: |Non-PFH periods: | |
| |years under standard amortization |10-year standard plan payment based|10-year standard plan payment based|10-year standard plan payment based| |
| |multiplied by income percentage |on amount owed when entered IBR. |on amount owed when entered IBR. |on amount owed when entered Pay As | |
| |factor corresponding to AGI and | | |You Earn. | |
| |marital status, divided by 12. | | | | |
|Discretionary Income |Difference between AGI and 100% of |Difference between AGI and 150% of |Same as Original IBR. |Same as Original IBR. | |
| |poverty line amount for family size|poverty line amount for family size| | | |
| |and state. |and state. | | | |
|Repayment/Forgiveness Period |Remaining balance forgiven after 25|Same as ICR. |Remaining balance forgiven after 20|Same as New Borrower IBR. | |
| |years of qualifying repayment | |years of qualifying repayment | | |
| |(includes periods of economic | |(includes periods of economic | | |
| |hardship deferment). | |hardship deferment). | | |
|Interest Subsidy |None. |If payment does not cover interest |Same as Original IBR. |Same as Original IBR. | |
| | |on subsidized loans, government | | | |
| | |pays remaining interest for 3 | | | |
| | |consecutive years (excluding | | | |
| | |periods of economic hardship | | | |
| | |deferment) from repayment start | | | |
| | |date under plan. | | | |
|Interest Capitalization |If monthly payment doesn’t cover |If monthly payment doesn’t cover |Same as Original IBR. |Same as Original IBR, except that | |
| |all interest, unpaid interest is |all interest, unpaid interest is | |amount capitalized under these | |
| |capitalized annually. Amount |capitalized when borrower no longer| |conditions is limited to 10% of | |
| |capitalized under this condition |has PFH or leaves plan. No limit on| |original principal balance at time | |
| |limited to 10% of original |amount that may be capitalized | |borrower entered Pay As You Earn | |
| |principal balance at time borrower |under these conditions. | |Plan. | |
| |entered ICR Plan. | | | | |
|Married Borrowers: Income |Joint AGI used if borrowers file |Same as ICR. |Same as ICR. |Same as ICR. | |
| |joint tax return. Only borrower’s | | | | |
| |AGI used if spouses file separate | | | | |
| |tax returns. | | | | |
|Married Borrowers: Loan Debt |Joint Direct Loan debt used in |Joint eligible loan debt used to |Same as Original IBR. |Same as Original IBR. | |
| |determining payment amount if |determine PFH status if borrowers | | | |
| |borrowers choose joint ICR |file joint tax return. Only | | | |
| |repayment option. |borrower’s loan debt used if | | | |
| | |spouses file separate tax returns. | | | |
|Leaving the Plan |Borrower may change to any other |Borrower must first be placed on |Same as Original IBR. |Same as ICR. | |
| |plan for which he/she is eligible. |Standard Repayment Plan. May change| | | |
| | |to a different plan only after | | | |
| | |making at least one payment under | | | |
| | |the Standard plan, or one payment | | | |
| | |under a reduced payment | | | |
| | |forbearance. | | | |
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[1] Under the ICR Plan, if the calculated monthly payment is greater than $0, but less than or equal to $5, the required monthly payment is $5.
Under the Original IBR, New Borrower IBR, and Pay As You Earn Plans:
• If the calculated monthly payment is less than $5, the required monthly payment is $0.
• If the calculated monthly payment is greater than or equal to $5, but less than $10, the required monthly payment is $10.
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