October 27, 2021

What is Income Driven Repayment (IDR)?

Repayment

An IDR is an option offered by the government to potentially lower monthly student loan payments. It’s an option for those who are struggling to make payments. If you find yourself in a situation where you can’t make payments, then this might be the move to take. It also opens the door for loan forgiveness.

How Do I Get An IDR?

The first thing you’ll need is to sign on the Student Loans website using your Federal Student Aid ID (FSA ID). If you don’t have this ID yet, then visit the FSA ID website first. From there, you’ll fill in your personal information and spousal information if you have one.

Then, you’ll see a link to an IRS data tool. Inputting your personal information there will display your current tax return. You’ll then connect this information to the Student Loans website.

If the tax return doesn’t represent your current income, you’ll have to showcase proof of income from the last 90 days. It will include gross income before taxes. You don't have to report untaxed supplement income from the government. You’ll also have to submit a recent federal tax return.

Each year under the IDR, you’ll have to recertify your information to continue your qualification. If you experience a change in income, then your monthly payments will also change.

The Four IDR Plans

The government offers four different plans you can choose from. Here are some details on each:

1. Income Contingent Repayment (ICR)

The ICR only applies to those who have Direct Loans. It accounts for the adjusted gross income, the payer’s family size, and the Direct Loan balance. You’ll have to pay qualifying payments in 25 years, and the rest will be eligible for forgiveness.

2. Income Based Repayment (IBR)

IBR is applicable for Direct Loans and FFELP. It will take into account your student loan debt, family size, and adjusted gross income. Payers often have to give around 10 to 15% of discretionary income. The IBR lasts for 20 to 25 years, and the rest will become eligible for forgiveness.

3. Pay As You Earn (PAYE)

PAYE is only applicable for those with Direct Loans. You’ll have to pay around 10 percent of discretionary income. You’ll also have to prove that you are experiencing partial financial hardship. The plan goes for 20 years of qualifying payments before forgiveness.

4. Revised Pay As You Earn (REPAYE)

REPAYE is applicable to direct loans, and you will pay around 10 percent of discretionary income. You’ll pay for 20 to 25 years, depending on the studies you took. Not every student loan will be applicable for REPAYE. You’ll find out if you are eligible once you begin the application.

Consider Your Options Carefully

Entering into a repayment plan means committing to at least 20 years of payments. If you believe that you can pay your loan before that, IDR may not be the best option. Another course to take is refinancing a loan through a private lender, but you’ll lose eligibility for loan forgiveness. Make sure that IDR is the best option available before you commit to it.

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.

See How Much You Can Save with Round-Ups

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