Whats the difference between income-based repayment (IBR) and income-contingent repayment (ICR)?
Both IBR and ICR base the monthly payment on a percentage of discretionary income, but IBR uses a smaller percentage and a smaller definition of discretionary income. For most borrowers IBR will yield a smaller monthly payment than ICR. IBR also offers superior benefits, such as government payment of accrued but unpaid interest on subsidized Stafford loans for the first three years. • Does income-based repayment provide the lowest monthly payment? For most borrowers either income-based repayment or extended repayment will provide the lowest monthly payment. Generally, borrowers who have low income compared with their debt will have a lower monthly payment under income-based repayment, while borrowers who have low debt compared with their income will have a lower monthly payment under extended repayment. • Is the loan forgiveness taxable? The 10-year public service loan forgiveness is not taxable under section 108(f) of the Internal Revenue Code because the forgiveness is restricted to
Related Questions
- Can you switch between options? Choose Extended at one time then change it to Income-Based Repayment (IBR) later?
- What’s the difference between Income-Based Repayment (IBR) and Income-Contingent Repayment (ICR)?
- Whats the difference between income-based repayment (IBR) and income-contingent repayment (ICR)?
