Syracuse University

Financial Aid Loans

Income Related Payment Plans

President Obama recently implemented changes to the Income Contingent Repayment Plan (ICR) that will provide relief to borrowers starting in 2012. Previously, Congress had approved similar changes to the Income Related Payment Plans (IBR) that will take effect on July 1, 2014.

The new ICR plan will cut the monthly student loan payment from 15% to 10% of discretionary income, and it will accelerate the loan forgiveness from 25 years to 20 years. The new repayment plan will be available to students who received at least one federal loan in 2011-12 and have borrowed federal loans as far back as 2008.

The improvement plan will allow students who have borrowed from the Federal Family Education Loan Program (FFELP) (loans held by a lender) and Federal Direct Loans (loans held by the Dept. of Education) to consolidate their FFELP loans into a Special Direct Consolidation Loan. Borrowers who are eligible for these new benefits will be contacted by their Servicers in 2012 with further details. Applications for the consolidation loan will be accepted from January to June 2012 only.

As an incentive, the interest rate on the guaranteed loans will be reduced by 0.25%, in addition to another possible 0.25% interest rate reduction borrowers may receive if they chose to have their loan payments automatically deducted from their bank account.

More information about IBR and other repayment plans is available online at here.