March 25, 2022

Can Student Loans Be Forgiven With Income Driven Repayment (IDR)?


One huge benefit of paying your federal student loans under an income driven repayment plan (IDR) is student loan forgiveness. It can be appealing to pay and have the rest forgiven. However, there are certain conditions you need to meet in order to receive forgiveness under an IDR plan. Understanding these requirements can help you to decide whether an income driven repayment plan is the best option for you.  

What is an IDR?

An IDR plan is a repayment option available to federal loan borrowers who may be struggling to make their student loan payments. If you are at risk of default or can foresee a scenario where you won’t be able to afford your normal monthly payments then an IDR plan may be a good option for you. In simple terms, under an IDR plan your payments are based on a percentage of your income discretionary income. While on an IDR plan your payments may increase or decrease when your income or family size changes.

  There are currently 4 IDR options—REPAYE, PAYE, ICR & IBR. 

How Do You Get Student Loan Forgiveness?

To have your loans forgiven under an IDR plan you’ll need to make payments for the term required under your specific repayment plan. Under all 4 plans any remaining loan balance will be forgiven at the end of the repayment period. 

The length of your repayment period will vary depending on your plan. Here’s a summary of each of the 4 IDR options:

  • REPAYE: Pay 10%  of your discretionary income for 20 years, or 25 years if you have any graduate loans.  No proof of partial financial hardship (PFH) is required.
  • ICR: Pay the lesser of (1) what you would pay on a repayment plan with a fixed monthly payment over 12 years, adjusted based on your income OR (2) 20% of your discretionary income. After 25 years on ICR any remaining balance will be forgiven. 
  • IBR: Pay 10% or 15% of your discretionary income for 20 or 25 years, depending on when you took out your loans. 
  • PAYE: Pay 10% of discretionary income for 20 years and any remaining balance will be forgiven. To be eligible for PAYE you must show a partial financial hardship AND you must have had no outstanding balance on or before Oct. 1, 2007, and you must have received a Direct Loan on or after Oct. 1, 2011.

Is an Income Driven Repayment Plan Worth It?

When you get into an IDR with a plan to get student loan forgiveness, remember that it is a commitment you’ll have to make for a long time. If you believe you can pay your loan in less than 20 to 25 years, you won’t need IDR. If it will be difficult for you to do, then this is an option to consider.

You’ll have to commit to the IDR to qualify for forgiveness. The good news is that the payment adjusts based on your income, so you won’t have to worry about being short on money. For some, it’s not an option they can ignore because they need an IDR to avoid going into default. In those scenarios, an IDR is an appealing option.

Use Chipper for Lower Payments

Chipper can help you find a student loan repayment plan that actually fits into your budget. You simply fill out your information and link your student loan account for us to generate your options in seconds. We help the average student loan borrower save over $300 a month off their student loan monthly payment. Lowering your monthly payment plan can game changing for your personal finance and can be done in minutes! Sign up for Chipper today to get on track with your student loans.

Use Chipper for The Best Path to Forgiveness

Finding your path to student loan forgiveness is easier than ever before. Chipper helps members find better Income-Driven Repayment (IDR) plans every day. Once enrolled in an eligible repayment plan, we can help you explore your forgiveness options and understand your path towards forgiveness. Sign up with Chipper today and get on track with your student loans.

Use Chipper for Round-Ups

Paying off your student loans doesn’t have to be a long and painful journey. Round-Ups are a way to directly pay off your loans with your everyday spending! By tracking your linked spending account(s), we will calculate the rounded up amount from each transaction in a week (IE spending $4.28 would add $0.72 to the weekly amount). We then initiate a payment towards your student loan for the weekly amount. Get chipping away on your student loans with Chipper today.

Use Chipper for Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness (PSLF) program was created to provide relief to borrowers aiding the public sector. Unfortunately, 30% of applicants are denied due to incorrect paperwork. We can help! Chipper was created to solve this issue by assisting borrowers in understanding their options as well as allowing forgiveness eligible users enroll into the best forgiveness program available. Sign up for Chipper today to see your student loan forgiveness options and get the forgiveness you deserve.

Use Chipper for Teacher Loan Forgiveness (TLF)

The Teacher Loan Forgiveness (TLF) program was created to enable teachers working in Title 1 schools to receive student loan forgiveness of up to $17,500 (depending on their teaching subject). Chipper has helped teachers from all over the country qualify for TLF program and can help you get the forgiveness you deserve today. Find out if you qualify for forgiveness in minutes with our employer search tool.

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