If your debt is high relative to your income, income-driven repayment (IDR) programs make it possible for federal student loan borrowers to pay back loans. They focus on your salary, family size, the state in which you live, and the form of federal student loan.
What is an Income-Driven Repayment Plan in Master’s Degree Loans?
Income-Based Repayment (IBR) is the most commonly available federal student loan income-driven repayment (IDR) option that has been available since 2009. Depending on their salary and family size, income-driven repayment programs will help borrowers keep their debt payments manageable with payment limits. IBR will then, after 25 years of qualifying contributions, repay the outstanding debt, if any.
What are the Four Income Driven Repayment Plans in a Graduate Student Loans?
1. Revised Pay As You Earn Repayment (REPAYE)
This program for repayment, known as REPAYE, is only for some direct loans. Your monthly payment rate will usually be 10% of your net revenue, depending on your adjusted gross income, family size, and overall qualifying federal student loan balance. After 20 or 25 years of qualifying payments, the outstanding loan balance is available for repayment, based on your form of study (undergraduate or graduate/professional). Please note that some student loans, including Federal Family Education Loan Program (FFELP) loans, Federal Direct Parent PLUS Loans, and Federal Direct Consolidation Loans with at least one Federal Direct Parent PLUS Loan, are not available for this package.
2. Pay As You Earn Repayment (PAYE)
This installment scheme, referred to as PAYE, is only for Direct Loans. The percentage of your monthly contribution is dependent on your adjusted gross income, family size, and cumulative balance of the federal student loan, and will normally be 10% of your net income. As specified in the Income-Driven Repayment Plan Proposal, this plan requires that you have a “partial financial difficulty.” After 20 years of qualifying interest, the outstanding loan balance is available for repayment.
3. Income-Based Repayment (IBR)
This repayment strategy is for both FFELP and Direct Loans, known as IBR. The amount of your contribution is based on your adjusted gross income, family size, and cumulative repayment for student loans. Generally, your monthly payment sum will be 10 to 15 percent of your net income (depending on the disbursement dates of your loans). As specified in the Income-Driven Repayment Plan Proposal, this plan requires that you have a “partial financial difficulty.” Your outstanding debt balance is available for repayment after 20 to 25 years (depending on your loan’s terms) of qualifying payments. For this package, parent PLUS loans and consolidation loans (including at least one parent PLUS loan) do not count.
4. Income-Contingent Repayment (ICR)
This package is for direct loans only, known as ICR, and the contributions are based on your adjusted gross income, family size, and overall direct loan balance (excluding parent PLUS loans). After 25 years of qualifying interest, the outstanding loan balance is available for forgiveness. Parent PLUS loans and restructuring loans that include parent PLUS loans that were repaid previous to 2006 are not eligible.
What do I need before applying for Income-Driven Repayment as a Graduate Student?
Before you complete the Income-Driven Repayment Plan Request, there are a few items to collect.
Federal Student Aid ID or Verified Email or Phone Number
To log into the StudentAid.gov website and initiate your income-driven repayment plan submission, use your FSA ID or checked email address or phone number. If you do not have an FSA ID, at StudentAid.gov, click Build Account.
Personal Information
Your address, email address, and phone number.
Spouse Information if you’re married
Unless you are divorced or do not legally access the income of your partner, your spouse will also need to sign the electronic application.
Income Information
You will be connected to the IRS Data Retrieval Tool after you have begun online with your Income-Driven Repayment Plan Request. That’s the fastest way to view your IRS tax return records and pass it. The use of the online tool helps to ensure that the data is accurate and that delivery is timely.
You will be asked to enter personal information to show your IRS tax return information while you are on the IRS platform. You will also be able to move the documents from the IRS site quickly and return to the StudentAid.gov site with your Income-Driven Repayment Plan Submission.
- If your income varies substantially from your most recently completed tax return, you must supply Great Lakes with evidence of your actual dated gross income after completing the electronic application (before taxes). Evidence of revenue must be from all sources (e.g., wages, unemployment, dividend income, interest income, tips, alimony, etc.). Acceptable signatures include a pay stub or a written letter from the employer on the company’s letterhead. In the last 90 days, the papers must be dated and contain the following:
- Your first and last names, along with your account number, SSN or mygreatlakes.org.
- The amount of the pay cycle and the average number of hours employed.
- Untaxed income such as Supplemental Security Income, child welfare, or federal and state public assistance need not be reported.
- You will need to include a copy of the most recent federal tax return or the things previously noted on this page if you wish to complete the paper Income-Driven Repayment Plan Submission.
How do I apply for an Income-Driven Repayment Plan in a Masters Degree Loans?
If you have any concerns, email the loan servicer before you apply for an income-driven repayment plan. You will be helped by your loan servicer to determine if one of these plans is right for you.
You must make a request called the Income-Driven Repayment Plan Request to apply. Online or on a paper form, you can request the paperwork, which you can get from your loan servicer. The application helps you to choose by name an income-driven repayment plan, or to ask the loan servicer to decide what income-driven plan or plans you apply for and to position you with the lowest monthly payment rate on the income-driven plan.
When you apply, you will be asked to submit income information that will be used to assess your eligibility for the PAYE or IBR plans and to measure the amount of your monthly payment for all repayment plans powered by income. This can be either the gross income adjusted (AGI) or substitute income documentation.
Your AGI will be used if
- In the last two years, you have filed a federal revenue tax return, and
- Your actual revenue is not substantially different from the taxes recorded in the most recent tax return on federal taxation.
You can provide your AGI in one of the following ways:
- Register using the online Request for Income-Driven Repayment Plan and use the IRS Data Retrieval Feature in the application to pass the federal income tax return revenue records.
- Using the Income-Driven Repayment Plan Submit document to have a paper copy of the federal income tax return or IRS tax return transcript that was most recently filed.
If you have not filed a federal income tax return in the last two years, or if your actual income varies substantially from the income recorded on the most recent federal income tax return (for example, if you have lost your work or undergone a drop in income), you can use alternate income documentation to assess your eligibility and measure the amount of your monthly payment. In one of the following forms, you should have alternate documentation:
- If you already earn taxable income, you must send an equivalent documentation of your income, such as a pay stub, to a paper Income-Driven Repayment Plan Request.
- You may show it on the online or paper application whether you actually don’t have any income or whether you just get untaxed income. In this situation, you are not expected to provide your salary with more documents.
It may take the servicer a few weeks to review your request, depending on whether you requested online or submitted a paper request form and whether you have submitted all the necessary paperwork, so they would need to collect details of your income and family size. If you are currently repaying your loans under a different repayment plan, when processing your request for an income-driven repayment plan, your loan servicer will extend a forbearance to your student loan account.
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