Repayment Plan

Income Contingent Plan (ICP)

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.

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:
    • 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
    • 20 percent of your monthly discretionary income.

Ten Percent Capitalization Benefit

If your calculated payment amount is less than the amount of interest that accrues on your loan, the interest is 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.