Student Loan Relief, Part 2: The Income Contingent Repayment Plan

Are you shackled by student loan debt?

Are you shackled by student loan debt?

I’m very interested in writing about student loans. Today’s post is #2 in a series of posts about repayment options available to student loan borrowers. Today I’ll discuss the “Income Contingent Repayment Plan”, known as the “ICR” plan.

As an Asheville student loan attorney I assist people who are overburdened with student loan debt. Student loan debts are burdening students, college graduates, and even parents of students. I’d like to help.

As a result of some aggressive lobbying, Congress radically altered the bankruptcy law in 2005 to make it even more difficult (it was already difficult!) to discharge student loan debts. Although some people qualify for a bankruptcy discharge of their student loan debts, most of us don’t. Click here to read a blog post I wrote on the subject of student loans and bankruptcy.

The good news is that, even though student loan debts are difficult to discharge in bankruptcy, there are some good non-bankruptcy options available. In my last blog post I wrote about the student loan Income Based Repayment Plan (“IBR” for short). Click here to read that post. Today, I’m going to discuss another alternative, the student loan Income Contingent Repayment Plan (“ICR”).

Although they sound similar, an ICR plan is different than an IBR plan. The primary difference is that the student loan borrower must repay interest in an ICR plan. That is not always the case with an IBR plan. Additionally, an IBR plan applies to more types of loans. IBR is available under both the Federal Family Education Loan Program (FFEL) and the Federal Direct Loan Program. ICR is only available under the Federal Direct Loan Program. Also, monthly payments under an ICR plan are often more than they would be under an IBR plan.

You may reasonably question why I’m even writing about an ICR plan when an IBR plan is usually better for student loan debt repayment. Good question. The answer is that it covers Direct Parent PLUS loans that are part of a Federal Direct Consolidation Loan. An IBR plan does not cover these types of student loans.

There are lots of parents who have borrowed money for their children’s education. Many of those parents are struggling with student loan debt. For those parents who have a Direct Parent PLUS loan that is part of a Direct Consolidation Loan that was consolidated on or after July 1, 2006, an ICR plan may be the help they need to stop struggling with high months student loan payments.

Here are the other types of student loans that are eligible for the ICR plan:

– Direct Subsidized Loans
– Direct Unsubsidized Loans
– Direct PLUS Loans made to graduate or professional students
– Direct Consolidation Loans (except Direct PLUS Consolidation Loans)

At Kight Law Office, we help people reduce their student loan debts. We’d like to help you. Contact us today to see if we can help you. We are a small, dedicated law firm. Whether you speak with Rod Kight, Ashley Kight, or Terri Pierce Smith, you can rest assured that we will work hard to help you with your student loan debts.