Income Contingent Repayment (ICR) plan becomes available to federal direct loan borrowers

The Education Department implements the Income Contingent Repayment (ICR) plan, the first income-driven repayment option in federal student loan history. ICR allows borrowers to cap monthly payments at the lesser of 20 percent of discretionary income or the 12-year repayment amount. Remaining balances are forgiven after 25 years. ICR is available only to William D. Ford Direct Loan borrowers and represents a fundamental shift in loan repayment from fixed payment schedules to income-based payment capacity. The program helps lower-income borrowers afford monthly payments.