Annual Updates to the Income Contingent Repayment (ICR) Plan Formula for 2017-William D. Ford Federal Direct Loan Program, 32803-32807 [2017-15061]
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Federal Register / Vol. 82, No. 136 / Tuesday, July 18, 2017 / Notices
Transmittal No. 16–74
Notice of Proposed Issuance of Letter of
Offer Pursuant to Section 36(b)(l) of the
Arms Export Control Act, as Amended
(i) Prospective Purchaser: Taipei
Economic and Cultural Representative
Office (TECRO) in the United States
(ii) Total Estimated Value:
Major Defense
Equipment*.
Other ..................................
Total ...........................
$47.5
$100.0
$147.5
(iii) Description and Quantity or
Quantities of Articles or Services Under
Consideration for Purchase:
Major Defense Equipment (MDE):
Fifty (50) AGM–88B High-Speed AntiRadiation Missiles (HARMs)
Ten (10) AGM–88B Training HARMs
Non-MDE includes:
HARM integration, LAU-l 18A
Launchers, missile containers, spare
and repair parts, support and test
equipment, Joint Mission Planning
System update, publications and
technical documentation, personnel
training and training equipment, U.S.
Government and contractor
engineering, technical and logistics
support services, and other related
elements of logistical and program
support.
(iv) Military Department: Air Force
(QBZ)
(v) Prior Related Cases. if any: None
(vi) Sales Commission Fee. etc., Paid,
Offered, or Agreed to be Paid: None
(vii) Sensitivity of Technology
Contained in the Defense Article or
Defense Services Proposed to be Sold:
See Attached Annex
(viii) Date Report Delivered to
Congress: 29 JUN 2017
* As defined in Section 47(6) of the
Arms Export Control Act.
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POLICY JUSTIFICATION
Taipei Economic and Cultural
Representative Office (TECRO) in the
United States—AGM–88B High-Speed
Anti-Radiation Missiles (HARM)
TECRO requested a possible sale of
fifty (50) AGM–88B HARMs and ten (10)
AGM–88B Training HARMs. This
request also includes: HARM
integration, LAU-l 18A Launchers,
missile containers, spare and repair
parts, support and test equipment, Joint
Mission Planning System update,
publications and technical
documentation, personnel training and
training equipment, U.S. Government
and contractor engineering, technical
and logistics support services, and other
related elements of logistical and
program support. The total estimated
program cost is $147.5 million.
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This proposed sale is consistent with
U.S. law and policy as expressed in
Public Law 96–8.
This proposed sale serves U.S.
national, economic, and security
interests by supporting the recipient’s
continuing efforts to modernize its
armed forces and to maintain a credible
defensive capability. The proposed sale
will help improve the security of the
recipient and assist in maintaining
political stability, military balance, and
economic progress in the region.
The proposed sale will improve the
recipient’s capability in current and
future defensive efforts. The recipient
will use the enhanced capability as a
deterrent to regional threats and to
strengthen homeland defense. The
recipient will have no difficulty
absorbing this equipment into its armed
forces.
The proposed sale of this equipment
and support will not alter the basic
military balance in the region.
Currently, market research is being
conducted to determine the viability of
a qualified contractor in accordance
with Federal Acquisition Regulations.
The purchaser typically requests offsets,
but any offsets will be determined
between the purchaser and the
contractor.
Implementation of this proposed sale
will not require the assignment of any
additional U.S. Government or
contractor representatives outside the
United States.
There will be no adverse impact on
U.S. defense readiness as a result of this
proposed sale.
the software to be exported is SECRET;
however, no software source code will
be disclosed. All reprogramming of
missile microprocessor memories must
be accomplished by U.S. Government
personnel or U.S. Government approved
contractors.
3. If a technologically advanced
adversary were to obtain knowledge of
the specific hardware and software
elements, the information could be used
to develop countermeasures which
might reduce weapon system
effectiveness or be used in the
development of a system with similar or
advanced capabilities.
4. This sale is necessary in
furtherance of the U.S. foreign policy
and national security objectives
outlined in the Policy Justification.
Moreover, the benefits to be derived
from this sale, as outlined in the Policy
Justification, outweigh the potential
damage that could result if the sensitive
technology were revealed to
unauthorized persons. A determination
has been made that the recipient
country can provide substantially the
same degree of protection for the
sensitive technology being released as
the U.S. Government. This sale is
necessary in furtherance of the U.S.
foreign policy and national security
objectives outlined in the Policy
Justification and in accordance with the
Taiwan Relations Act.
5. All defense articles and services
listed in this transmittal are authorized
for release and export to the Taipei
Economic and Cultural Representative
Office (TECRO) in the United States.
Transmittal No. 16–74
[FR Doc. 2017–15018 Filed 7–17–17; 8:45 am]
Notice of Proposed Issuance of Letter of
Offer Pursuant to Section 36(b)(l) of the
Arms Export Control Act
BILLING CODE 5001–06–P
Annex Item No. vii
(iii) Sensitivity of Technology:
1. AGM–88B High-Speed AntiRadiation Missile (HARM) is a
supersonic air-to-surface missile
designed to seek and destroy enemy
radar-equipped air defense systems.
HARM has a proportional guidance
system that hones in on enemy radar
emissions through a fixed antenna and
seeker head in the missile nose. The
missile consists of four sections;
guidance section, warhead, control
section, and rocket motor.
2. The highest classification of the
hardware to be exported is SECRET. The
highest classification of the technical
documentation to be exported is
SECRET, but no radar cross section and
infrared signature data nor U.S.-only
tactics or tactical doctrine will be
disclosed. The highest classification of
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DEPARTMENT OF EDUCATION
[Catalog of Federal Domestic Assistance
number 84.063]
Annual Updates to the Income
Contingent Repayment (ICR) Plan
Formula for 2017—William D. Ford
Federal Direct Loan Program
Federal Student Aid,
Department of Education.
ACTION: Notice.
AGENCY:
The Secretary announces the
annual updates to the ICR plan formula
for 2017, as required by 34 CFR
685.209(b)(1)(ii)(A), to give notice to
Direct Loan borrowers and the public
regarding how monthly ICR payment
amounts will be calculated for the
2017–2018 year.
DATES: The adjustments to the income
percentage factors for the ICR plan
SUMMARY:
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formula contained in this notice are
effective from July 1, 2017, to June 30,
2018, for any borrower who enters the
ICR plan or has his or her monthly
payment amount recalculated under the
ICR plan during that period.
FOR FURTHER INFORMATION CONTACT: Ian
Foss, U.S. Department of Education, 830
First Street NE., Room 113H2,
Washington, DC 20202. Telephone:
(202) 377–3681 or by email: ian.foss@
ed.gov.
If you use a telecommunications
device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay
Service, toll free, at 1–800–877–8339.
SUPPLEMENTARY INFORMATION: Under the
William D. Ford Federal Direct Loan
(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 income, 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 IncomeBased 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
his or her loans under the ICR plan pays
the lesser of: (1) The amount that he or
she would pay over 12 years 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. 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 2017, 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 2017
• 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 have updated the income
percentage factors that were published
in the Federal Register on April 4, 2016
(81 FR 19153). Specifically, we have
revised the table of income percentage
factors by changing the dollar amounts
of the incomes shown by a percentage
equal to the estimated percentage
change between the not-seasonallyadjusted Consumer Price Index for all
urban consumers for December 2016
and December 2017.
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. However, the revised
repayment amount more accurately
reflects the impact of inflation on the
borrower’s current ability to repay.
Accessible Format: Individuals with
disabilities can obtain this document in
an accessible format (e.g., braille, large
print, audiotape, or compact disc) on
request to the contact person listed
under FOR FURTHER INFORMATION
CONTACT in this section of the notice.
Electronic Access to This Document:
The official version of this document is
the document published in the Federal
Register. Free internet access to the
official edition of the Federal Register
and the Code of Federal Regulations is
available via the Federal Digital System
at: www.gpo.gov/fdsys. At this site, you
can view this document, as well as all
other documents of this Department
published in the Federal Register, in
text or Portable Document Format
(PDF). To use PDF you must have
Adobe Acrobat Reader, which is
available free at the site.
You may also access documents of the
Department published in the Federal
Register by using the article search
feature at: www.federalregister.gov.
Specifically, through the advanced
search feature at this site, you can limit
your search to documents published by
the Department.
Program Authority: 20 U.S.C. 1087 et seq.
Dated: July 13, 2017.
Matthew D. Sessa,
Acting Chief Operating Officer, Federal
Student Aid.
Attachment 1—Income Percentage
Factors for 2017
INCOME PERCENTAGE FACTORS FOR 2017
Single
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Income
Married/Head of Household
% Factor
$11,668
$16,055
$20,658
$25,366
$29,862
$35,531
$44,629
$55,973
$67,319
$80,910
$103,602
$146,735
$168,245
$299,673
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Income
55.00
57.79
60.57
66.23
71.89
80.33
88.77
100.00
100.00
111.80
123.50
141.20
150.00
200.00
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% Factor
$11,668
$18,410
$21,939
$28,681
$35,531
$44,629
$55,972
$67,319
$84,340
$112,698
$152,404
$213,144
$348,294
.......................................................
50.52
56.68
59.56
67.79
75.22
87.61
100.00
100.00
109.40
125.00
140.60
150.00
200.00
.......................................................
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Attachment 2—Examples of the
Calculations of Monthly Repayment
Amounts
General notes about the examples in
this attachment:
• We have a calculator that borrowers
can use to estimate what their payment
amounts would be under the ICR plan.
The calculator is called the ‘‘Repayment
Estimator’’ and is available at
StudentLoans.gov. This calculator
provides a detailed, individualized
assessment of a borrower’s loans and
repayment plan options, including the
ICR plan.
• The interest rates used in the
examples are for illustration only. The
actual interest rates on an individual
borrower’s Direct Loans depend on the
loan type and when the postsecondary
institution first disbursed the Direct
Loan to the borrower.
• The Poverty Guideline amounts
used in the examples are from the 2017
U.S. Department of Health and Human
Services (HHS) Poverty Guidelines for
the 48 contiguous States and the District
of Columbia. Different Poverty
Guidelines apply to residents of Alaska
and Hawaii. The Poverty Guidelines for
2017 were published in the Federal
Register on January 31, 2017 (82 FR
8831).
• All of the examples use an income
percentage factor corresponding to an
adjusted gross income (AGI) in the table
in Attachment 1. If your AGI is not
listed in the income percentage factors
table in Attachment 1, calculate the
applicable income percentage by
following the instructions under the
‘‘Interpolation’’ heading later in this
attachment.
• Married borrowers may repay their
Direct Loans jointly under the ICR plan.
If a married couple elects this option,
we add the outstanding balance on the
Direct Loans of each borrower and we
add together both borrowers’ AGIs to
determine a joint ICR payment amount.
We then prorate the joint payment
amount for each borrower based on the
proportion of that borrower’s debt to the
total outstanding balance. We bill each
borrower separately.
• For example, if a married couple,
John and Sally, has a total outstanding
Direct Loan debt of $60,000, of which
$40,000 belongs to John and $20,000 to
Sally, we would apportion 67 percent of
the monthly ICR payment to John and
the remaining 33 percent to Sally. To
take advantage of a joint ICR payment,
married couples need not file taxes
jointly; they may file separately and
subsequently provide the other spouse’s
tax information to the borrower’s
Federal loan servicer.
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Calculating the monthly payment
amount using a standard amortization
and a 12-year repayment period.
The formula to amortize a loan with
a standard schedule (in which each
payment is the same over the course of
the repayment period) is as follows:
M = P × <(I ÷ 12) ÷ [1 ¥ {1 + (I ÷ 12)
}∧–N]>
In the formula—
• M is the monthly payment amount;
• P is the outstanding principal
balance of the loan at the time the
calculation is performed;
• I is the annual interest rate on the
loan, expressed as a decimal (for
example, for a loan with an interest rate
of 6 percent, 0.06); and
• N is the total number of months in
the repayment period (for example, for
a loan with a 12-year repayment period,
144 months).
For example, assume that Billy has a
$10,000 Direct Unsubsidized Loan with
an interest rate of 6 percent.
Step 1: To solve for M, first simplify
the numerator of the fraction by which
we multiply P, the outstanding
principal balance. To do this divide I,
the interest rate, as a decimal, by 12. In
this example, Billy’s interest rate is 6
percent. As a decimal, 6 percent is 0.06.
• 0.06 ÷ 12 = 0.005
Step 2: Next, simplify the
denominator of the fraction by which
we multiply P. To do this divide I, the
interest rate, as a decimal, by 12. Then,
add one. Next, raise the sum of the two
figures to the negative power that
corresponds to the length of the
repayment period in months. In this
example, because we are amortizing a
loan to calculate the monthly payment
amount under the ICR plan, the
applicable figure is 12 years, which is
144 months. Finally, subtract the result
from one.
• 0.06 ÷ 12 = 0.005
• 1 + 0.005 = 1.005
• 1.005 ∧ ¥144 = 0.48762628
• 1 ¥ 0.48762628 = 0.51237372
Step 3: Next, resolve the fraction by
dividing the result from Step one by the
result from Step two.
• 0.005 ÷ 0.51237372 = 0.0097585
Step 4: Finally, solve for M, the
monthly payment amount, by
multiplying the outstanding principal
balance of the loan by the result of Step
3.
• $10,000 × 0.0097585 = $97.59
The remainder of the examples in this
attachment will only show the results of
the formula.
Example 1. Brenda is single with no
dependents and has $15,000 in Direct
Subsidized and Unsubsidized Loans.
The interest rate on Brenda’s loans is 6
percent, and she has an AGI of $29,862.
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Step 1: Determine the total monthly
payment amount based on what Brenda
would pay over 12 years using standard
amortization. To do this, use the
formula that precedes Example 1. In this
example, the monthly payment amount
would be $146.38.
Step 2: Multiply the result of Step 1
by the income percentage factor shown
in the income percentage factors table
(see Attachment 1 to this notice) that
corresponds to Brenda’s AGI. In this
example, an AGI of $29,862 corresponds
to an income percentage factor of 71.89
percent.
• 0.7189 × $146.38 = $105.23
Step 3: Determine 20 percent of
Brenda’s discretionary income and
divide by 12 (discretionary income is
AGI minus the HHS Poverty Guideline
amount for a borrower’s family size and
State of residence). For Brenda, subtract
the Poverty Guideline amount for a
family of one from her AGI, multiply the
result by 20 percent, and then divide by
12:
• $29,862 ¥ $12,060 = $17,802
• $17,802 × 0.20 = $3,560.40
• $3,560.40 ÷ 12 = $296.70
Step 4: Compare the amount from
Step 2 with the amount from Step 3.
The lower of the two will be the
monthly ICR payment amount. In this
example, Brenda will be paying the
amount calculated under Step 2
($105.23).
Note: Brenda would have a lower
payment under other income-driven
repayment plans. Specifically, Brenda’s
payment would be $98.10 under the
PAYE and REPAYE plans. However,
Brenda’s payment would be $147.15
under the IBR plan, which is higher
than the payment she would have under
the ICR plan.
Example 2. Joseph is married to Susan
and has no dependents. They file their
Federal income tax return jointly.
Joseph has a Direct Loan balance of
$10,000, and Susan has a Direct Loan
balance of $15,000. The interest rate on
all of the loans is 6 percent.
Joseph and Susan have a combined
AGI of $84,340 and are repaying their
loans jointly under the ICR plan (for
general information regarding joint ICR
payments for married couples, see the
fifth and sixth bullets under the heading
‘‘General notes about the examples in
this attachment’’).
Step 1: Add Joseph’s and Susan’s
Direct Loan balances to determine their
combined aggregate loan balance:
• $10,000 + $15,000 = $25,000
Step 2: Determine the combined
monthly payment amount for Joseph
and Susan based on what both
borrowers would pay over 12 years
using standard amortization. To do this,
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use the formula that precedes Example
1. In this example, the combined
monthly payment amount would be
$243.96.
Step 3: Multiply the result of Step 2
by the income percentage factor shown
in the income percentage factors table
(see Attachment 1 to this notice) that
corresponds to Joseph and Susan’s
combined AGI. In this example, the
combined AGI of $84,340 corresponds
to an income percentage factor of 109.40
percent.
• 1.094 × $243.96 = $266.90
Step 4: Determine 20 percent of
Joseph and Susan’s combined
discretionary income (discretionary
income is AGI minus the HHS Poverty
Guideline amount for a borrower’s
family size and State of residence). To
do this, subtract the Poverty Guideline
amount for a family of two from the
combined AGI, multiply the result by 20
percent, and then divide by 12:
• $84,340 ¥ $ 16,240 = $68,100
• $68,100 × 0.20 = $13,620
• $13,620 ÷ 12 = $1,135.00
Step 5: Compare the amount from
Step 3 with the amount from Step 4.
The lower of the two will be Joseph and
Susan’s joint monthly payment amount.
Joseph and Susan will jointly pay the
amount calculated under Step 3
($266.90).
Note: For Joseph and Susan, the ICR
plan provides the lowest monthly
payment of all of the income-driven
repayment plans. Joseph and Susan
would not be eligible for the IBR or
PAYE plans, and would have a
combined monthly payment under the
REPAYE plan of $499.83.
Step 6: Because Joseph and Susan are
jointly repaying their Direct Loans
under the ICR plan, the monthly
payment amount calculated under Step
5 applies to both Joseph’s and Susan’s
loans. To determine the amount for
which each borrower will be
responsible, prorate the amount
calculated under Step 4 by each
spouse’s share of the combined Direct
Loan debt. Joseph has a Direct Loan debt
of $10,000 and Susan has a Direct Loan
debt of $15,000. For Joseph, the monthly
payment amount will be:
• $10,000 ÷ ($10,000 + $15,000) = 40
percent
• 0.40 × $266.90 = $106.76
For Susan, the monthly payment
amount will be:
• $15,000 ÷ ($10,000 + $15,000) = 60
percent
• 0.60 × $266.90 = $160.14
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Example 3. David is single with no
dependents and has $60,000 in Direct
Subsidized and Unsubsidized Loans.
The interest rate on all of the loans is
6 percent, and David’s AGI is $35,531.
Step 1: Determine the total monthly
payment amount based on what David
would pay over 12 years using standard
amortization. To do this, use the
formula that precedes Example 1. In this
example, the monthly payment amount
would be $585.51.
Step 2: Multiply the result of Step 1
by the income percentage factor shown
in the income percentage factors table
(see Attachment 1 to this notice) that
corresponds to David’s AGI. In this
example, an AGI of $35,531 corresponds
to an income percentage factor of 80.33
percent.
• 0.8033 × $585.51 = $470.34
Step 3: Determine 20 percent of
David’s discretionary income and divide
by 12 (discretionary income is AGI
minus the HHS Poverty Guideline
amount for a borrower’s family size and
State of residence). To do this, subtract
the Poverty Guideline amount for a
family of one from David’s AGI,
multiply the result by 20 percent, and
then divide by 12:
• $35,531 ¥ $12,060 = $23,471
• $23,471 × 0.20 = $4,694.20
• $4,694.20 ÷ 12 = $391.18
Step 4: Compare the amount from
Step 2 with the amount from Step 3.
The lower of the two will be David’s
monthly payment amount. In this
example, David will be paying the
amount calculated under Step 3
($379.68).
Note: David would have a lower
payment under each of the other
income-driven plans. Specifically,
David’s payment would be $145.34
under the PAYE and REPAYE plans and
$218.01 under the IBR plan.
Interpolation. If an income is not
included on the income percentage
factor table, calculate the income
percentage factor through linear
interpolation. For example, assume that
Joan is single with an income of
$50,000.
Step 1: Find the closest income listed
that is less than Joan’s income ($50,000)
and the closest income listed that is
greater than Joan’s income ($50,000).
Step 2: Subtract the lower amount
from the higher amount (for this
discussion we will call the result the
‘‘income interval’’):
• $55,773 ¥ $44,629 = $11,114
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Step 3: Determine the difference
between the two income percentage
factors that correspond to the incomes
used in Step 2 (for this discussion, we
will call the result the ‘‘income
percentage factor interval’’):
• 100.00 percent ¥ 88.77 percent =
11.23 percent
Step 4: Subtract from Joan’s income
the closest income shown on the chart
that is less than Joan’s income of
$50,000:
• $50,000 ¥ $44,629 = $5,371
Step 5: Divide the result of Step 4 by
the income interval determined in Step
2:
• 5,371 ÷ 11,114 = 48.33 percent
Step 6: Multiply the result of Step 5
by the income percentage factor
interval:
• 11.23 percent × 48.33 percent = 5.43
percent
Step 7: Add the result of Step 6 to the
lower of the two income percentage
factors used in Step 3 to calculate the
income percentage factor interval for
50,000 in income:
• 5.43 percent + 88.77 percent = 94.20
percent (rounded to the nearest
hundredth)
The result is the income percentage
factor that we will use to calculate
Joan’s monthly repayment amount
under the ICR plan.
Attachment 3—Charts Showing Sample
Income-Driven Repayment Amounts for
Single and Married Borrowers
Below are two charts that provide
first-year payment amount estimates for
a variety of loan debt sizes and incomes
under all of the income-driven
repayment plans and the 10-Year
Standard Repayment Plan. The first
chart is for single borrowers who have
a family size of one. The second chart
is for a borrower who is married or a
head of household and who has a family
size of three. The ICR plan calculations
assume that the loan debt has an interest
rate of 6 percent. For married borrowers,
the calculations assume that the
borrower files a joint Federal income tax
return with his or her spouse and that
the borrower’s spouse does not have
Federal student loans. A field with a
‘‘-’’ character indicates that the borrower
in the example would not be eligible to
enter the applicable repayment based
plan based on the borrower’s income,
loan debt, and family size.
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SAMPLE FIRST-YEAR MONTHLY REPAYMENT AMOUNTS FOR A SINGLE BORROWER
Family Size = 1
Income
Initial Debt .........................
20,000
40,000
60,000
80,000
100,000
Plan
$20,000
ICR ...................................
IBR ....................................
PAYE ................................
REPAYE ...........................
10-Year Standard .............
ICR ...................................
IBR ....................................
PAYE ................................
REPAYE ...........................
10-Year Standard .............
ICR ...................................
IBR ....................................
PAYE ................................
REPAYE ...........................
10-Year Standard .............
ICR ...................................
IBR ....................................
PAYE ................................
REPAYE ...........................
10-Year Standard .............
ICR ...................................
IBR ....................................
PAYE ................................
REPAYE ...........................
10-Year Standard .............
$117
24
16
16
222
132
24
16
16
444
132
24
16
16
666
132
24
16
16
888
132
24
16
16
1,110
$40,000
$165
183
183
222
330
274
183
183
444
466
274
183
183
666
466
274
183
183
888
466
274
183
183
1,110
$60,000
$195
349
222
390
349
349
444
586
524
349
349
666
781
524
349
349
888
799
524
349
349
1,110
$80,000
$100,000
$217
516
222
433
516
444
650
516
516
666
867
774
516
516
888
1,083
774
516
516
1,110
$237
683
222
475
683
444
712
683
666
950
683
683
888
1,187
1,024
683
683
1,110
SAMPLE FIRST-YEAR MONTHLY REPAYMENT AMOUNTS FOR A MARRIED OR HEAD-OF-HOUSEHOLD BORROWER
Family size = 3
Income
Initial Debt .........................
20,000
40,000
60,000
80,000
sradovich on DSK3GMQ082PROD with NOTICES
100,000
Plan
$20,000
ICR ...................................
IBR ....................................
PAYE ................................
REPAYE ...........................
10-Year Standard .............
ICR ...................................
IBR ....................................
PAYE ................................
REPAYE ...........................
10-Year Standard .............
ICR ...................................
IBR ....................................
PAYE ................................
REPAYE ...........................
10-Year Standard .............
ICR ...................................
IBR ....................................
PAYE ................................
REPAYE ...........................
10-Year Standard .............
ICR ...................................
IBR ....................................
PAYE ................................
REPAYE ...........................
10-Year Standard .............
$0
0
0
0
222
0
0
0
0
444
0
0
0
0
666
0
0
0
0
888
0
0
0
0
1,110
$40,000
$159
117
78
78
222
317
117
78
78
444
326
117
78
78
666
326
117
78
78
888
326
117
78
78
1,110
$60,000
$195
245
222
390
367
245
245
444
586
367
245
245
666
660
367
245
245
888
660
367
245
245
1,110
[FR Doc. 2017–15061 Filed 7–17–17; 8:45 am]
BILLING CODE 4000–01–P
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17:47 Jul 17, 2017
Jkt 241001
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Frm 00023
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$80,000
$209
411
222
418
411
411
444
633
617
411
411
666
835
617
411
411
888
993
617
411
411
1,110
$100,000
$230
578
222
461
578
444
699
578
578
666
921
867
578
578
888
1,152
867
578
578
1,110
]]>Agencies
[Federal Register Volume 82, Number 136 (Tuesday, July 18, 2017)]
[Notices]
[Pages 32803-32807]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-15061]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF EDUCATION
[Catalog of Federal Domestic Assistance number 84.063]
Annual Updates to the Income Contingent Repayment (ICR) Plan
Formula for 2017--William D. Ford Federal Direct Loan Program
AGENCY: Federal Student Aid, Department of Education.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Secretary announces the annual updates to the ICR plan
formula for 2017, as required by 34 CFR 685.209(b)(1)(ii)(A), to give
notice to Direct Loan borrowers and the public regarding how monthly
ICR payment amounts will be calculated for the 2017-2018 year.
DATES: The adjustments to the income percentage factors for the ICR
plan
[[Page 32804]]
formula contained in this notice are effective from July 1, 2017, to
June 30, 2018, for any borrower who enters the ICR plan or has his or
her monthly payment amount recalculated under the ICR plan during that
period.
FOR FURTHER INFORMATION CONTACT: Ian Foss, U.S. Department of
Education, 830 First Street NE., Room 113H2, Washington, DC 20202.
Telephone: (202) 377-3681 or by email: ian.foss@ed.gov.
If you use a telecommunications device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay Service, toll free, at 1-800-
877-8339.
SUPPLEMENTARY INFORMATION: Under the William D. Ford Federal Direct
Loan (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 income, 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 his or her loans under the ICR
plan pays the lesser of: (1) The amount that he or she would pay over
12 years 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. 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 2017, 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 2017
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 have updated
the income percentage factors that were published in the Federal
Register on April 4, 2016 (81 FR 19153). Specifically, we have revised
the table of income percentage factors by changing the dollar amounts
of the incomes shown by a percentage equal to the estimated percentage
change between the not-seasonally-adjusted Consumer Price Index for all
urban consumers for December 2016 and December 2017.
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. However, the
revised repayment amount more accurately reflects the impact of
inflation on the borrower's current ability to repay.
Accessible Format: Individuals with disabilities can obtain this
document in an accessible format (e.g., braille, large print,
audiotape, or compact disc) on request to the contact person listed
under FOR FURTHER INFORMATION CONTACT in this section of the notice.
Electronic Access to This Document: The official version of this
document is the document published in the Federal Register. Free
internet access to the official edition of the Federal Register and the
Code of Federal Regulations is available via the Federal Digital System
at: www.gpo.gov/fdsys. At this site, you can view this document, as
well as all other documents of this Department published in the Federal
Register, in text or Portable Document Format (PDF). To use PDF you
must have Adobe Acrobat Reader, which is available free at the site.
You may also access documents of the Department published in the
Federal Register by using the article search feature at:
www.federalregister.gov. Specifically, through the advanced search
feature at this site, you can limit your search to documents published
by the Department.
Program Authority: 20 U.S.C. 1087 et seq.
Dated: July 13, 2017.
Matthew D. Sessa,
Acting Chief Operating Officer, Federal Student Aid.
Attachment 1--Income Percentage Factors for 2017
Income Percentage Factors for 2017
------------------------------------------------------------------------
Single Married/Head of Household
------------------------------------------------------------------------
Income % Factor Income % Factor
------------------------------------------------------------------------
$11,668 55.00 $11,668 50.52
$16,055 57.79 $18,410 56.68
$20,658 60.57 $21,939 59.56
$25,366 66.23 $28,681 67.79
$29,862 71.89 $35,531 75.22
$35,531 80.33 $44,629 87.61
$44,629 88.77 $55,972 100.00
$55,973 100.00 $67,319 100.00
$67,319 100.00 $84,340 109.40
$80,910 111.80 $112,698 125.00
$103,602 123.50 $152,404 140.60
$146,735 141.20 $213,144 150.00
$168,245 150.00 $348,294 200.00
$299,673 200.00 ................ ................
------------------------------------------------------------------------
[[Page 32805]]
Attachment 2--Examples of the Calculations of Monthly Repayment Amounts
General notes about the examples in this attachment:
We have a calculator that borrowers can use to estimate
what their payment amounts would be under the ICR plan. The calculator
is called the ``Repayment Estimator'' and is available at
StudentLoans.gov. This calculator provides a detailed, individualized
assessment of a borrower's loans and repayment plan options, including
the ICR plan.
The interest rates used in the examples are for
illustration only. The actual interest rates on an individual
borrower's Direct Loans depend on the loan type and when the
postsecondary institution first disbursed the Direct Loan to the
borrower.
The Poverty Guideline amounts used in the examples are
from the 2017 U.S. Department of Health and Human Services (HHS)
Poverty Guidelines for the 48 contiguous States and the District of
Columbia. Different Poverty Guidelines apply to residents of Alaska and
Hawaii. The Poverty Guidelines for 2017 were published in the Federal
Register on January 31, 2017 (82 FR 8831).
All of the examples use an income percentage factor
corresponding to an adjusted gross income (AGI) in the table in
Attachment 1. If your AGI is not listed in the income percentage
factors table in Attachment 1, calculate the applicable income
percentage by following the instructions under the ``Interpolation''
heading later in this attachment.
Married borrowers may repay their Direct Loans jointly
under the ICR plan. If a married couple elects this option, we add the
outstanding balance on the Direct Loans of each borrower and we add
together both borrowers' AGIs to determine a joint ICR payment amount.
We then prorate the joint payment amount for each borrower based on the
proportion of that borrower's debt to the total outstanding balance. We
bill each borrower separately.
For example, if a married couple, John and Sally, has a
total outstanding Direct Loan debt of $60,000, of which $40,000 belongs
to John and $20,000 to Sally, we would apportion 67 percent of the
monthly ICR payment to John and the remaining 33 percent to Sally. To
take advantage of a joint ICR payment, married couples need not file
taxes jointly; they may file separately and subsequently provide the
other spouse's tax information to the borrower's Federal loan servicer.
Calculating the monthly payment amount using a standard
amortization and a 12-year repayment period.
The formula to amortize a loan with a standard schedule (in which
each payment is the same over the course of the repayment period) is as
follows:
M = P x <(I / 12) / [1 - {1 + (I / 12) {time} [caret]-N]>
In the formula--
M is the monthly payment amount;
P is the outstanding principal balance of the loan at the
time the calculation is performed;
I is the annual interest rate on the loan, expressed as a
decimal (for example, for a loan with an interest rate of 6 percent,
0.06); and
N is the total number of months in the repayment period
(for example, for a loan with a 12-year repayment period, 144 months).
For example, assume that Billy has a $10,000 Direct Unsubsidized
Loan with an interest rate of 6 percent.
Step 1: To solve for M, first simplify the numerator of the
fraction by which we multiply P, the outstanding principal balance. To
do this divide I, the interest rate, as a decimal, by 12. In this
example, Billy's interest rate is 6 percent. As a decimal, 6 percent is
0.06.
0.06 / 12 = 0.005
Step 2: Next, simplify the denominator of the fraction by which we
multiply P. To do this divide I, the interest rate, as a decimal, by
12. Then, add one. Next, raise the sum of the two figures to the
negative power that corresponds to the length of the repayment period
in months. In this example, because we are amortizing a loan to
calculate the monthly payment amount under the ICR plan, the applicable
figure is 12 years, which is 144 months. Finally, subtract the result
from one.
0.06 / 12 = 0.005
1 + 0.005 = 1.005
1.005 [caret] -144 = 0.48762628
1 - 0.48762628 = 0.51237372
Step 3: Next, resolve the fraction by dividing the result from Step
one by the result from Step two.
0.005 / 0.51237372 = 0.0097585
Step 4: Finally, solve for M, the monthly payment amount, by
multiplying the outstanding principal balance of the loan by the result
of Step 3.
$10,000 x 0.0097585 = $97.59
The remainder of the examples in this attachment will only show the
results of the formula.
Example 1. Brenda is single with no dependents and has $15,000 in
Direct Subsidized and Unsubsidized Loans. The interest rate on Brenda's
loans is 6 percent, and she has an AGI of $29,862.
Step 1: Determine the total monthly payment amount based on what
Brenda would pay over 12 years using standard amortization. To do this,
use the formula that precedes Example 1. In this example, the monthly
payment amount would be $146.38.
Step 2: Multiply the result of Step 1 by the income percentage
factor shown in the income percentage factors table (see Attachment 1
to this notice) that corresponds to Brenda's AGI. In this example, an
AGI of $29,862 corresponds to an income percentage factor of 71.89
percent.
0.7189 x $146.38 = $105.23
Step 3: Determine 20 percent of Brenda's discretionary income and
divide by 12 (discretionary income is AGI minus the HHS Poverty
Guideline amount for a borrower's family size and State of residence).
For Brenda, subtract the Poverty Guideline amount for a family of one
from her AGI, multiply the result by 20 percent, and then divide by 12:
$29,862 - $12,060 = $17,802
$17,802 x 0.20 = $3,560.40
$3,560.40 / 12 = $296.70
Step 4: Compare the amount from Step 2 with the amount from Step 3.
The lower of the two will be the monthly ICR payment amount. In this
example, Brenda will be paying the amount calculated under Step 2
($105.23).
Note: Brenda would have a lower payment under other income-driven
repayment plans. Specifically, Brenda's payment would be $98.10 under
the PAYE and REPAYE plans. However, Brenda's payment would be $147.15
under the IBR plan, which is higher than the payment she would have
under the ICR plan.
Example 2. Joseph is married to Susan and has no dependents. They
file their Federal income tax return jointly. Joseph has a Direct Loan
balance of $10,000, and Susan has a Direct Loan balance of $15,000. The
interest rate on all of the loans is 6 percent.
Joseph and Susan have a combined AGI of $84,340 and are repaying
their loans jointly under the ICR plan (for general information
regarding joint ICR payments for married couples, see the fifth and
sixth bullets under the heading ``General notes about the examples in
this attachment'').
Step 1: Add Joseph's and Susan's Direct Loan balances to determine
their combined aggregate loan balance:
$10,000 + $15,000 = $25,000
Step 2: Determine the combined monthly payment amount for Joseph
and Susan based on what both borrowers would pay over 12 years using
standard amortization. To do this,
[[Page 32806]]
use the formula that precedes Example 1. In this example, the combined
monthly payment amount would be $243.96.
Step 3: Multiply the result of Step 2 by the income percentage
factor shown in the income percentage factors table (see Attachment 1
to this notice) that corresponds to Joseph and Susan's combined AGI. In
this example, the combined AGI of $84,340 corresponds to an income
percentage factor of 109.40 percent.
1.094 x $243.96 = $266.90
Step 4: Determine 20 percent of Joseph and Susan's combined
discretionary income (discretionary income is AGI minus the HHS Poverty
Guideline amount for a borrower's family size and State of residence).
To do this, subtract the Poverty Guideline amount for a family of two
from the combined AGI, multiply the result by 20 percent, and then
divide by 12:
$84,340 - $ 16,240 = $68,100
$68,100 x 0.20 = $13,620
$13,620 / 12 = $1,135.00
Step 5: Compare the amount from Step 3 with the amount from Step 4.
The lower of the two will be Joseph and Susan's joint monthly payment
amount. Joseph and Susan will jointly pay the amount calculated under
Step 3 ($266.90).
Note: For Joseph and Susan, the ICR plan provides the lowest
monthly payment of all of the income-driven repayment plans. Joseph and
Susan would not be eligible for the IBR or PAYE plans, and would have a
combined monthly payment under the REPAYE plan of $499.83.
Step 6: Because Joseph and Susan are jointly repaying their Direct
Loans under the ICR plan, the monthly payment amount calculated under
Step 5 applies to both Joseph's and Susan's loans. To determine the
amount for which each borrower will be responsible, prorate the amount
calculated under Step 4 by each spouse's share of the combined Direct
Loan debt. Joseph has a Direct Loan debt of $10,000 and Susan has a
Direct Loan debt of $15,000. For Joseph, the monthly payment amount
will be:
$10,000 / ($10,000 + $15,000) = 40 percent
0.40 x $266.90 = $106.76
For Susan, the monthly payment amount will be:
$15,000 / ($10,000 + $15,000) = 60 percent
0.60 x $266.90 = $160.14
Example 3. David is single with no dependents and has $60,000 in
Direct Subsidized and Unsubsidized Loans. The interest rate on all of
the loans is 6 percent, and David's AGI is $35,531.
Step 1: Determine the total monthly payment amount based on what
David would pay over 12 years using standard amortization. To do this,
use the formula that precedes Example 1. In this example, the monthly
payment amount would be $585.51.
Step 2: Multiply the result of Step 1 by the income percentage
factor shown in the income percentage factors table (see Attachment 1
to this notice) that corresponds to David's AGI. In this example, an
AGI of $35,531 corresponds to an income percentage factor of 80.33
percent.
0.8033 x $585.51 = $470.34
Step 3: Determine 20 percent of David's discretionary income and
divide by 12 (discretionary income is AGI minus the HHS Poverty
Guideline amount for a borrower's family size and State of residence).
To do this, subtract the Poverty Guideline amount for a family of one
from David's AGI, multiply the result by 20 percent, and then divide by
12:
$35,531 - $12,060 = $23,471
$23,471 x 0.20 = $4,694.20
$4,694.20 / 12 = $391.18
Step 4: Compare the amount from Step 2 with the amount from Step 3.
The lower of the two will be David's monthly payment amount. In this
example, David will be paying the amount calculated under Step 3
($379.68).
Note: David would have a lower payment under each of the other
income-driven plans. Specifically, David's payment would be $145.34
under the PAYE and REPAYE plans and $218.01 under the IBR plan.
Interpolation. If an income is not included on the income
percentage factor table, calculate the income percentage factor through
linear interpolation. For example, assume that Joan is single with an
income of $50,000.
Step 1: Find the closest income listed that is less than Joan's
income ($50,000) and the closest income listed that is greater than
Joan's income ($50,000).
Step 2: Subtract the lower amount from the higher amount (for this
discussion we will call the result the ``income interval''):
$55,773 - $44,629 = $11,114
Step 3: Determine the difference between the two income percentage
factors that correspond to the incomes used in Step 2 (for this
discussion, we will call the result the ``income percentage factor
interval''):
100.00 percent - 88.77 percent = 11.23 percent
Step 4: Subtract from Joan's income the closest income shown on the
chart that is less than Joan's income of $50,000:
$50,000 - $44,629 = $5,371
Step 5: Divide the result of Step 4 by the income interval
determined in Step 2:
5,371 / 11,114 = 48.33 percent
Step 6: Multiply the result of Step 5 by the income percentage
factor interval:
11.23 percent x 48.33 percent = 5.43 percent
Step 7: Add the result of Step 6 to the lower of the two income
percentage factors used in Step 3 to calculate the income percentage
factor interval for 50,000 in income:
5.43 percent + 88.77 percent = 94.20 percent (rounded to the
nearest hundredth)
The result is the income percentage factor that we will use to
calculate Joan's monthly repayment amount under the ICR plan.
Attachment 3--Charts Showing Sample Income-Driven Repayment Amounts for
Single and Married Borrowers
Below are two charts that provide first-year payment amount
estimates for a variety of loan debt sizes and incomes under all of the
income-driven repayment plans and the 10-Year Standard Repayment Plan.
The first chart is for single borrowers who have a family size of one.
The second chart is for a borrower who is married or a head of
household and who has a family size of three. The ICR plan calculations
assume that the loan debt has an interest rate of 6 percent. For
married borrowers, the calculations assume that the borrower files a
joint Federal income tax return with his or her spouse and that the
borrower's spouse does not have Federal student loans. A field with a
``-'' character indicates that the borrower in the example would not be
eligible to enter the applicable repayment based plan based on the
borrower's income, loan debt, and family size.
[[Page 32807]]
Sample First-Year Monthly Repayment Amounts for a Single Borrower
--------------------------------------------------------------------------------------------------------------------------------------------------------
Family Size = 1
---------------------------------------------------------------------------------------------------------------------------------------------------------
Income Plan $20,000 $40,000 $60,000 $80,000 $100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
Initial Debt............................... 20,000 ICR.......................... $117 $165 $195 $217 $237
IBR.......................... 24 - - - -
PAYE......................... 16 183 - - -
REPAYE....................... 16 183 349 516 683
10-Year Standard............. 222 222 222 222 222
40,000 ICR.......................... 132 330 390 433 475
IBR.......................... 24 274 - - -
PAYE......................... 16 183 349 - -
REPAYE....................... 16 183 349 516 683
10-Year Standard............. 444 444 444 444 444
60,000 ICR.......................... 132 466 586 650 712
IBR.......................... 24 274 524 - -
PAYE......................... 16 183 349 516 -
REPAYE....................... 16 183 349 516 683
10-Year Standard............. 666 666 666 666 666
80,000 ICR.......................... 132 466 781 867 950
IBR.......................... 24 274 524 774 -
PAYE......................... 16 183 349 516 683
REPAYE....................... 16 183 349 516 683
10-Year Standard............. 888 888 888 888 888
100,000 ICR.......................... 132 466 799 1,083 1,187
IBR.......................... 24 274 524 774 1,024
PAYE......................... 16 183 349 516 683
REPAYE....................... 16 183 349 516 683
10-Year Standard............. 1,110 1,110 1,110 1,110 1,110
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sample First-Year Monthly Repayment Amounts for a Married or Head-of-Household Borrower
--------------------------------------------------------------------------------------------------------------------------------------------------------
Family size = 3
---------------------------------------------------------------------------------------------------------------------------------------------------------
Income Plan $20,000 $40,000 $60,000 $80,000 $100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
Initial Debt............................... 20,000 ICR.......................... $0 $159 $195 $209 $230
IBR.......................... 0 117 - - -
PAYE......................... 0 78 - - -
REPAYE....................... 0 78 245 411 578
10-Year Standard............. 222 222 222 222 222
40,000 ICR.......................... 0 317 390 418 461
IBR.......................... 0 117 367 - -
PAYE......................... 0 78 245 411 -
REPAYE....................... 0 78 245 411 578
10-Year Standard............. 444 444 444 444 444
60,000 ICR.......................... 0 326 586 633 699
IBR.......................... 0 117 367 617 -
PAYE......................... 0 78 245 411 578
REPAYE....................... 0 78 245 411 578
10-Year Standard............. 666 666 666 666 666
80,000 ICR.......................... 0 326 660 835 921
IBR.......................... 0 117 367 617 867
PAYE......................... 0 78 245 411 578
REPAYE....................... 0 78 245 411 578
10-Year Standard............. 888 888 888 888 888
100,000 ICR.......................... 0 326 660 993 1,152
IBR.......................... 0 117 367 617 867
PAYE......................... 0 78 245 411 578
REPAYE....................... 0 78 245 411 578
10-Year Standard............. 1,110 1,110 1,110 1,110 1,110
--------------------------------------------------------------------------------------------------------------------------------------------------------
[FR Doc. 2017-15061 Filed 7-17-17; 8:45 am]
BILLING CODE 4000-01-P
