ICR Plan (Income-Contingent Repayment)

Income-Contingent Repayment (ICR) is the oldest federal income-driven repayment plan, dating to 1994. It's rarely the best plan for borrowers who qualify for newer options like SAVE, PAYE, or IBR — but it's the only IDR plan currently available (after consolidation) to borrowers who have Parent PLUS loans.

How the math works

Under ICR, your monthly payment is the lesser of:

• 20% of your discretionary income (calculated using 100% of the poverty line — less generous than other IDR plans), or
• The fixed payment you'd make over a 12-year term, adjusted for income.

That 20% rate is much higher than PAYE/IBR's 10% or SAVE's 5–10%, which is why ICR rarely wins on monthly payment.

Forgiveness

ICR forgives any remaining balance after 25 years of qualifying payments.

Why ICR still matters for Parent PLUS

Parent PLUS loans are not eligible for SAVE, PAYE, or new-borrower IBR. The standard workaround is to consolidate the Parent PLUS loan into a Direct Consolidation Loan, which then becomes eligible for ICR. It's not great, but for many Parent PLUS borrowers, ICR is the only path to a lower payment.

PSLF and ICR

ICR is a qualifying repayment plan for PSLF. Parent PLUS borrowers working in qualifying employment can pursue PSLF by consolidating into a Direct Consolidation Loan, switching to ICR, and certifying their employment.