ICR Plan (Income-Contingent Repayment)
The oldest income-driven plan with 20% discretionary income payments or a 12-year fixed amount, with forgiveness after 25 years—the only IDR option for Parent PLUS loans.
What You Need to Know
Income-Contingent Repayment (ICR) is the original income-driven plan, introduced in 1995. While it's been superseded by more generous plans for most borrowers, it remains the only IDR option for Parent PLUS loans after consolidation.
Payment Calculation (whichever is less):
- 20% of discretionary income, OR
- What you'd pay on a fixed 12-year repayment plan adjusted for income
- Discretionary income = income above 100% of poverty line
Why It's Less Popular:
- Higher payment percentage (20% vs 5-15% in other plans)
- Longer forgiveness timeline (25 years)
- More complex calculation
- Generally higher payments than SAVE, IBR, or PAYE
Who Should Use ICR:
- Parents with Parent PLUS loans (after consolidating to a Direct Consolidation Loan)
- Borrowers who don't qualify for other IDR plans
- Those with very low income relative to debt (ICR's 100% poverty threshold can help)
Important for Parent PLUS Borrowers:
- Consolidate Parent PLUS loans into a Direct Consolidation Loan
- Only then can you enroll in ICR
- It's your only income-driven option (other plans exclude Parent PLUS)
Key Details:
- Forgiveness after 25 years of qualifying payments
- Counts toward Public Service Loan Forgiveness (PSLF)
- Interest capitalizes annually
Sources & References
This information is sourced from authoritative government and academic institutions:
- studentaid.gov
https://studentaid.gov/manage-loans/repayment/plans/income-driven
Related Calculators & Tools
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