If a student's loan debt is high but their income is modest or zero, they may qualify for an income-driven repayment (IDR) plan. Most major types of federal student loans--except for PLUS loans for parents--are eligible for an IDR plan. Income-driven plans allow borrowers to cap their monthly payments to 10%, 15%, or 20% of disposable income for up to 20 or 25 years, after which the remaining balance is forgiven.
Currently, four specific IDRs are available:
1. Income-Based Repayment (IBR)
2. Pay As You Earn (PAYE)
3. Revised Pay As You Earn (REPAYE)
4. Income-Contingent Repayment (ICR)