The notice was issued by
DATES: The adjustments to the income percentage factors for the ICR plan formula contained in this notice are applicable from
FOR FURTHER INFORMATION CONTACT:
* * *
The Secretary announces the annual updates to the ICR plan formula for 2021 to give notice to borrowers and the public regarding how monthly ICR payment amounts will be calculated for the 2021-2022 year under the William D. Ford Federal Direct Loan (Direct Loan) Program, Assistance Listing Number 84.063.
Under the Direct Loan Program, borrowers may choose to repay their non-defaulted loans (Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans made to graduate or professional students, and Direct Consolidation Loans) under the ICR plan. The ICR plan bases the borrower's repayment amount on the borrower's Adjusted Gross Income (AGI), family size, loan amount, and the interest rate applicable to each of the borrower's loans.
ICR is one of several income-driven repayment plans. Other income-driven repayment plans include the Income-Based Repayment (IBR) plan, the Pay As You Earn Repayment (PAYE) plan, and the Revised Pay As You Earn Repayment (REPAYE) plan. The IBR, PAYE, and REPAYE plans provide lower payment amounts than the ICR plan for most borrowers.
A Direct Loan borrower who repays under the ICR plan pays the lesser of: (1) The monthly amount that would be required over a 12-year repayment period with fixed payments, multiplied by an income percentage factor; or (2) 20 percent of discretionary income.
Each year, to reflect changes in inflation, we adjust the income percentage factor used to calculate a borrower's ICR payment, as required by 34 CFR 685.209(b)(1)(ii)(A). We use the adjusted income percentage factors to calculate a borrower's monthly ICR payment amount when the borrower initially applies for the ICR plan or when the borrower submits his or her annual income documentation, as required under the ICR plan. This notice contains the adjusted income percentage factors for 2021, examples of how the monthly payment amount in ICR is calculated, and charts showing sample repayment amounts based on the adjusted ICR plan formula. This information is included in the following three attachments:
* Attachment 1–Income Percentage Factors for 2021
* Attachment 2–Examples of the Calculations of Monthly Repayment Amounts
* Attachment 3–Charts Showing Sample Repayment Amounts for Single and Married Borrowers
In Attachment 1, to reflect changes in inflation, we updated the income percentage factors that were published in the
The income percentage factors reflected in Attachment 1 may cause a borrower's payments to be lower than they were in prior years, even if the borrower's income is the same as in the prior year. The revised repayment amount more accurately reflects the impact of inflation on the borrower's current ability to repay.
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Program Authority: 20 U.S.C. 1087 et seq.
Acting Chief Operating Officer, Federal Student Aid.
[FR Doc. 2021-07605 Filed 4-13-21;
BILLING CODE 4000-01-P
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