The four Income-Driven Repayment Plans all share the following features:
- Payment Amounts: Each plan’s monthly payment is determined, and can change, every year when you recertify your annual income and family size.
- Recertification: You are required to “recertify” your income each year by filling out another Income-Driven Repayment Plan Application. (Note: There are serious penalties for different plans if you don’t recertify by the deadline.)
- Loan Forgiveness: Each of these repayment plans qualifies you for Loan Forgiveness after making 20 or 25 years of qualifying payments, depending on the plan. (Note: You may be required by the IRS to pay taxes on any amount that is forgiven.)
- Interest Benefit: Since your payment could be as low as $0, there may be times when your monthly payment does not cover the interest you owe for that period. In that situation, the government may step in to cover some or all of the remaining interest owed. (Note: the ICR plan does not offer this feature.)Revised Pay as You Earn (REPAYE)
