Annual Updates to the Income-Contingent Repayment (ICR) Plan Formula for 2024-William D. Ford Federal Direct Loan Program, 23990-23993 [2024-07263]
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Federal Register / Vol. 89, No. 67 / Friday, April 5, 2024 / Notices
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[FR Doc. 2024–07260 Filed 4–4–24; 8:45 am]
BILLING CODE 6353–01–P
DEPARTMENT OF EDUCATION
Annual Updates to the IncomeContingent Repayment (ICR) Plan
Formula for 2024—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 2024 to give notice to borrowers and
the public regarding how monthly ICR
payment amounts will be calculated for
the 2024–2025 year under the William
D. Ford Federal Direct Loan (Direct
Loan) Program, Assistance Listing
Number 84.063.
DATES: The adjustments to the income
percentage factors for the ICR plan
formula contained in this notice are
applicable from July 1, 2024, to June 30,
2025, for any borrower who enters the
ICR plan or has a monthly payment
amount under the ICR plan recalculated
during that period.
FOR FURTHER INFORMATION CONTACT:
Travis Sturlaugson, U.S. Department of
Education, 830 First Street NE,
Washington, DC 20202. Telephone:
(202) 377–4174. Email:
travis.sturlaugson@ed.gov.
If you are deaf, hard of hearing, or
have a speech disability and wish to
access telecommunications relay
services, please dial 7–1–1.
SUPPLEMENTARY INFORMATION: Effective
July 1, 2024, borrowers may select the
ICR plan only for repayment of nondefaulted Direct Consolidation Loans
SUMMARY:
that repaid one or more Direct or
Federal PLUS Loans made to a parent
borrower. However, borrowers who
were repaying other types of Direct
Loans under the ICR plan as of July 1,
2024, may continue to repay their loans
under that plan. Under the ICR plan, the
borrower’s monthly payment amount is
based on the borrower’s Adjusted Gross
Income (AGI), family size, loan amount,
and the interest rate applicable to each
of the borrower’s loans.
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 their discretionary income.
We adjust the income percentage
factors annually to reflect changes in
inflation and announce the adjusted
factors in the Federal Register, 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
annual income documentation, as
required under the ICR plan. This notice
contains the adjusted income percentage
factors for 2024, examples of how the
monthly ICR payment amount 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 2024
• Attachment 2—Examples of the
Calculations of Monthly Repayment
Amounts
• Attachment 3—Charts Showing
Sample ICR 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 Federal Register on April 26,
2023 (88 FR 25388). 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 notseasonally-adjusted Consumer Price
Index for all urban consumers for
December 2023 and December 2024.
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.
Accessible Format: On request to the
program contact person listed under FOR
FURTHER INFORMATION CONTACT,
individuals with disabilities can obtain
this document in an accessible format.
The Department will provide the
requestor with an accessible format that
may include Rich Text Format (RTF) or
text format (txt), a thumb drive, an MP3
file, braille, large print, audiotape, or
compact disc, or other accessible format.
Electronic Access to This Document:
The official version of this document is
the document published in the Federal
Register. You may access the official
edition of the Federal Register and the
Code of Federal Regulations at
www.govinfo.gov. 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 this 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.
Richard Cordray,
Chief Operating Officer, Federal Student Aid.
Attachment 1—Income Percentage
Factors for 2024
INCOME PERCENTAGE FACTORS FOR 2024
Single
Married/head of household
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AGI
$13,736
$18,900
$24,319
$29,861
$35,153
$41,828
$52,536
$65,890
Percent factor
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AGI
55.00
57.79
60.57
66.23
71.89
80.33
88.77
100.00
$13,736
$21,672
$25,826
$33,764
$41,828
$52,536
$65,889
$79,249
Fmt 4703
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Percent factor
....................................................................
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....................................................................
....................................................................
....................................................................
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50.52
56.68
59.56
67.79
75.22
87.61
100.00
100.00
Federal Register / Vol. 89, No. 67 / Friday, April 5, 2024 / Notices
23991
INCOME PERCENTAGE FACTORS FOR 2024—Continued
Single
Married/head of household
AGI
Percent factor
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$79,249 .....................................................................
$95,245 .....................................................................
$121,958 ...................................................................
$172,734 ...................................................................
$198,056 ...................................................................
$352,771 ...................................................................
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 ‘‘Loan
Simulator’’ and is available at
studentaid.gov/loan-simulator. Based on
information entered into the calculator
by the borrower (for example, income,
family size, and tax filing status), 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 loan was first
disbursed.
• The Poverty Guideline amounts
used in the examples are from the 2024
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
2024 were published in the Federal
Register on January 17, 2024 (89 FR
2961).
• All of the examples use an income
percentage factor corresponding to an
adjusted gross income (AGI) in the table
in Attachment 1. If an AGI is not listed
in the income percentage factors table in
Attachment 1, the applicable income
percentage can be calculated 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 both spouses have loans eligible for
the ICR plan. If a married couple elects
this option, we determine a joint ICR
payment amount based on the combined
outstanding balances of each borrower’s
Direct Loans and the combined AGIs of
both borrowers. We then prorate the
joint payment amount for each borrower
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100.00
111.80
123.50
141.20
150.00
200.00
AGI
Percent factor
$99,285 ....................................................................
$132,667 ..................................................................
$179,409 ..................................................................
$250,911 ..................................................................
$410,007 ..................................................................
..................................................................................
109.40
125.00
140.60
150.00
200.00
............................
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 Briana, has a total outstanding
Direct Loan debt of $60,000 that is
eligible for repayment under the ICR
plan, of which $40,000 belongs to John
and $20,000 to Briana, we would
apportion 67 percent of the monthly ICR
payment to John and the remaining 33
percent to Briana. 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 × < (I ÷ 12) ÷ [1 ¥ {1 + (I ÷ 12)}
∧ ¥ N] >
In the formula—
• M is the monthly payment amount;
• P is the outstanding principal and
interest balance of the loan at the time
the loan entered repayment;
• 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 Loan that is eligible for
repayment under the ICR plan 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 expressed 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
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we multiply P. To do this divide I (the
interest rate expressed 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 1 by the
result from Step 2.
• 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. In each of the examples,
the Direct Loan amounts represent the
outstanding principal balance at the
time the loans entered repayment.
Example 1. Kesha is single with no
dependents and has $15,000 in Direct
Loans that are eligible for repayment
under the ICR plan. The interest rate on
Kesha’s loans is 6 percent, and she has
an AGI of $35,153.
Step 1: Determine the total monthly
payment amount based on what Kesha
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 Kesha’s AGI. In this
example, an AGI of $35,153 corresponds
to an income percentage factor of 71.89
percent.
• 0.7189 × $146.38 = $105.23
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Step 3: Now, determine the monthly
payment amount equal to 20 percent of
Kesha’s 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 HHS
Poverty Guideline amount for a family
of one from Kesha’s AGI, multiply the
result by 20 percent, and then divide by
12:
• $35,153¥$15,060 = $20,093
• $20,093 × 0.20 = $4,018.60
• $4,018.60 ÷ 12 = $334.88
Step 4: Compare the amount from
Step 2 with the amount from Step 3. In
this example, Kesha would pay the
amount calculated under Step 2
($105.23), since this is the lesser of the
two payment amounts.
Example 2. Paul is married to Jesse
and they have no dependents. They file
their Federal income tax return jointly.
Paul has a Direct Loan balance of
$10,000, and Jesse has a Direct Loan
balance of $15,000. Both of their Direct
Loans are eligible for repayment under
the ICR plan and have an interest rate
of 6 percent.
Paul and Jesse have a combined AGI
of $99,285 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 Paul’s and Jesse’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 Paul and
Jesse based on what both borrowers
would pay over 12 years using standard
amortization. To do this, use the
formula that precedes Example 1. In this
example, their 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 Paul and Jesse’s
combined AGI. In this example, the
combined AGI of $99,285 corresponds
to an income percentage factor of 109.40
percent.
• 1.094 × $243.96 = $266.90
Step 4: Now, determine the monthly
payment amount equal to 20 percent of
Paul and Jesse’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
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family of two from the combined AGI,
multiply the result by 20 percent, and
then divide by 12:
• $99,285¥$20,440 = $78,845
• $78,845 × 0.20 = $15,769
• $15,769 ÷ 12 = $1,314.08
Step 5: Compare the amount from
Step 3 with the amount from Step 4.
Paul and Jesse would jointly pay the
amount calculated under Step 3
($266.90), since this is the lesser of the
two amounts.
Step 6: Because Paul and Jesse are
jointly repaying their Direct Loans
under the ICR plan, the monthly
payment amount calculated under Step
5 applies to Paul and Jesse’s combined
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. Paul has a Direct Loan debt
of $10,000 and Jesse has a Direct Loan
debt of $15,000. For Paul, the monthly
payment amount will be:
• $10,000 ÷ ($10,000 + $15,000) = 40
percent
• 0.40 × $266.90 = $106.76
For Jesse, the monthly payment amount
will be:
• $15,000 ÷ ($10,000 + $15,000) = 60
percent
• 0.60 × $266.90 = $160.14
Example 3. Santiago is single with no
dependents and has a combined balance
of $60,000 in Direct Loans that are
eligible for repayment under the ICR
plan. Each of Santiago’s loans has an
interest rate of 6 percent, and Santiago’s
AGI is $41,828.
Step 1: Determine the total monthly
payment amount based on what
Santiago 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 Santiago’s AGI. In this
example, an AGI of $41,828 corresponds
to an income percentage factor of 80.33
percent.
• 0.8033 × $585.51 = $470.34
Step 3: Now, determine the monthly
payment amount equal to 20 percent of
Santiago’s 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 HHS
Poverty Guideline amount for a family
of one from Santiago’s AGI, multiply the
result by 20 percent, and then divide by
12:
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• $41,828¥$15,060 = $26,768
• $26,768 × 0.20 = $5,353.60
• $5,353.60 ÷ 12 = $446.13
Step 4: Compare the amount from
Step 2 with the amount from Step 3. In
this example, Santiago would pay the
amount calculated under Step 3
($446.13), since this is the lesser of the
two amounts.
Interpolation. If an AGI is not
included on the income percentage
factor table, calculate the income
percentage factor through linear
interpolation. For example, assume that
Jocelyn is single with an AGI of $50,000.
Step 1: Find the closest AGI listed
that is less than Jocelyn’s AGI of
$50,000 ($41,828) and the closest AGI
listed that is greater than Jocelyn’s AGI
of $50,000 ($52,536).
Step 2: Subtract the lower amount
from the higher amount (for this
discussion we will call the result the
‘‘income interval’’):
• $52,536¥$41,828 = $10,708
Step 3: Determine the difference
between the two income percentage
factors that correspond to the AGIs used
in Step 2 (for this discussion, we will
call the result the ‘‘income percentage
factor interval’’):
• 88.77 percent¥80.33 percent = 8.44
percent
Step 4: Subtract from Jocelyn’s AGI
the closest AGI shown on the chart that
is less than Jocelyn’s AGI of $50,000:
• $50,000¥$41,828 = $8,172
Step 5: Divide the result of Step 4 by
the income interval determined in Step
2:
• $8,172 ÷ $10,708 = 76.32 percent
Step 6: Multiply the result of Step 5
by the income percentage factor interval
that was calculated in Step 3:
• 8.44 percent × 76.32 percent = 6.44
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 an
AGI of $50,000:
• 6.44 percent + 80.33 percent = 86.77
percent (rounded to the nearest
hundredth)
The result is the income percentage
factor that we will use to calculate
Jocelyn’s monthly repayment amount
under the ICR plan.
Attachment 3—Charts Showing Sample
Income Contingent Repayment (ICR)
Plan 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 AGIs
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23993
Federal Register / Vol. 89, No. 67 / Friday, April 5, 2024 / Notices
under the ICR plan. The first chart is for
a single borrower who has 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 calculations in Attachment 3
assume that the loan debt has an interest
rate of 6 percent. For the married
borrower, the calculations assume that
the borrower files a joint Federal income
tax return and that the borrower’s
spouse does not have Federal student
loans.
SAMPLE FIRST-YEAR MONTHLY REPAYMENT AMOUNTS FOR A SINGLE BORROWER
Family size = 1
AGI
Initial debt
$20,000
$20,000 ..................................................
$40,000 ..................................................
$60,000 ..................................................
$80,000 ..................................................
$100,000 ................................................
$40,000
$82
82
82
82
82
$60,000
$152
305
416
416
416
$80,000
$186
371
557
742
749
$100,000
$196
393
589
785
981
$222
445
667
889
1,111
SAMPLE FIRST-YEAR MONTHLY REPAYMENT AMOUNTS FOR A MARRIED OR HEAD-OF-HOUSEHOLD BORROWER
Family size = 3
AGI
Initial debt
$20,000
$20,000 ..................................................
$40,000 ..................................................
$60,000 ..................................................
$80,000 ..................................................
$100,000 ................................................
$0
0
0
0
0
$60,000
$144
236
236
236
236
BILLING CODE 4000–01–P
DEPARTMENT OF ENERGY
Tentative Agenda Topics
Environmental Management SiteSpecific Advisory Board Chairs
Wednesday, May 1, 2024
• Program Updates
• Chairs Round Robin
• Public Comment
• Board Business/Open Discussion
Office of Environmental
Management, Department of Energy.
ACTION: Notice of open meeting.
AGENCY:
This notice announces a
meeting of the Environmental
Management Site-Specific Advisory
Board (EM SSAB) Chairs. The Federal
Advisory Committee Act requires that
public notice of this meeting be
announced in the Federal Register.
DATES: Wednesday, May 1, 2024; 8
a.m.–5 p.m. EDT. Thursday. May 2,
2024; 8 a.m.–12:15 p.m. EDT.
ADDRESSES: Christopher Conference
Center, 20 North Plaza Boulevard,
Chillicothe, OH 45601.
FOR FURTHER INFORMATION CONTACT:
Kelly Snyder, EM SSAB Designated
Federal Officer, 702–918–6715 or by
email at kelly.snyder@em.doe.gov or
visit https://energy.gov/em/listings/
chairs-meetings.
SUPPLEMENTARY INFORMATION:
Purpose of the Board: The purpose of
the Board is to make recommendations
to the Department of Energy
SUMMARY:
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Thursday, May 2, 2024
• Public Comment
• Board Business/Open Discussion
Public Participation: This meeting
will be open to the public and public
comments will be accepted. Public
comments can be submitted from those
unable to attend. Comments received in
writing no later than 5:00 p.m. EDT on
Monday, April 29, 2024, will be read
aloud during the meeting. Please send
comments to Kelly Snyder at
kelly.snyder@em.doe.gov. The
Designated Federal Officer is
empowered to conduct the meeting in a
fashion that will facilitate the orderly
conduct of business.
Minutes: Minutes will also be
available at the following website:
https://energy.gov/em/listings/chairsmeetings.
Signing Authority: This document of
the Department of Energy was signed on
March 29, 2024, by David Borak, Deputy
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Environmental Management Program in
the areas of environmental restoration,
waste management, and related
activities.
[FR Doc. 2024–07263 Filed 4–4–24; 8:45 am]
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$40,000
$100,000
$196
392
588
783
903
$214
428
643
857
1,071
Committee Management Officer,
pursuant to delegated authority from the
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the Department of Energy. This
administrative process in no way alters
the legal effect of this document upon
publication in the Federal Register.
Signed in Washington, DC, on April 2,
2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S.
Department of Energy.
[FR Doc. 2024–07247 Filed 4–4–24; 8:45 am]
BILLING CODE 6450–01–P
DEPARTMENT OF ENERGY
Western Area Power Administration
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[Federal Register Volume 89, Number 67 (Friday, April 5, 2024)]
[Notices]
[Pages 23990-23993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-07263]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF EDUCATION
Annual Updates to the Income-Contingent Repayment (ICR) Plan
Formula for 2024--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 2024 to give notice to borrowers and the public regarding
how monthly ICR payment amounts will be calculated for the 2024-2025
year under the William D. Ford Federal Direct Loan (Direct Loan)
Program, Assistance Listing Number 84.063.
DATES: The adjustments to the income percentage factors for the ICR
plan formula contained in this notice are applicable from July 1, 2024,
to June 30, 2025, for any borrower who enters the ICR plan or has a
monthly payment amount under the ICR plan recalculated during that
period.
FOR FURTHER INFORMATION CONTACT: Travis Sturlaugson, U.S. Department of
Education, 830 First Street NE, Washington, DC 20202. Telephone: (202)
377-4174. Email: [email protected].
If you are deaf, hard of hearing, or have a speech disability and
wish to access telecommunications relay services, please dial 7-1-1.
SUPPLEMENTARY INFORMATION: Effective July 1, 2024, borrowers may select
the ICR plan only for repayment of non-defaulted Direct Consolidation
Loans that repaid one or more Direct or Federal PLUS Loans made to a
parent borrower. However, borrowers who were repaying other types of
Direct Loans under the ICR plan as of July 1, 2024, may continue to
repay their loans under that plan. Under the ICR plan, the borrower's
monthly payment amount is based on the borrower's Adjusted Gross Income
(AGI), family size, loan amount, and the interest rate applicable to
each of the borrower's loans.
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 their discretionary income.
We adjust the income percentage factors annually to reflect changes
in inflation and announce the adjusted factors in the Federal Register,
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 annual income documentation, as required under the ICR
plan. This notice contains the adjusted income percentage factors for
2024, examples of how the monthly ICR payment amount 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 2024
Attachment 2--Examples of the Calculations of Monthly
Repayment Amounts
Attachment 3--Charts Showing Sample ICR 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 Federal Register
on April 26, 2023 (88 FR 25388). 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 2023 and December 2024.
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.
Accessible Format: On request to the program contact person listed
under FOR FURTHER INFORMATION CONTACT, individuals with disabilities
can obtain this document in an accessible format. The Department will
provide the requestor with an accessible format that may include Rich
Text Format (RTF) or text format (txt), a thumb drive, an MP3 file,
braille, large print, audiotape, or compact disc, or other accessible
format.
Electronic Access to This Document: The official version of this
document is the document published in the Federal Register. You may
access the official edition of the Federal Register and the Code of
Federal Regulations at www.govinfo.gov. 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
this 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.
Richard Cordray,
Chief Operating Officer, Federal Student Aid.
Attachment 1--Income Percentage Factors for 2024
Income Percentage Factors for 2024
----------------------------------------------------------------------------------------------------------------
Single Married/head of household
----------------------------------------------------------------------------------------------------------------
AGI Percent factor AGI Percent factor
----------------------------------------------------------------------------------------------------------------
$13,736.................................... 55.00 $13,736....................... 50.52
$18,900.................................... 57.79 $21,672....................... 56.68
$24,319.................................... 60.57 $25,826....................... 59.56
$29,861.................................... 66.23 $33,764....................... 67.79
$35,153.................................... 71.89 $41,828....................... 75.22
$41,828.................................... 80.33 $52,536....................... 87.61
$52,536.................................... 88.77 $65,889....................... 100.00
$65,890.................................... 100.00 $79,249....................... 100.00
[[Page 23991]]
$79,249.................................... 100.00 $99,285....................... 109.40
$95,245.................................... 111.80 $132,667...................... 125.00
$121,958................................... 123.50 $179,409...................... 140.60
$172,734................................... 141.20 $250,911...................... 150.00
$198,056................................... 150.00 $410,007...................... 200.00
$352,771................................... 200.00 .............................. ................
----------------------------------------------------------------------------------------------------------------
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 ``Loan Simulator'' and is available at studentaid.gov/loan-simulator. Based on information entered into the calculator by the
borrower (for example, income, family size, and tax filing status),
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 loan was
first disbursed.
The Poverty Guideline amounts used in the examples are
from the 2024 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 2024 were published in the Federal
Register on January 17, 2024 (89 FR 2961).
All of the examples use an income percentage factor
corresponding to an adjusted gross income (AGI) in the table in
Attachment 1. If an AGI is not listed in the income percentage factors
table in Attachment 1, the applicable income percentage can be
calculated 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 both spouses have loans eligible for the ICR
plan. If a married couple elects this option, we determine a joint ICR
payment amount based on the combined outstanding balances of each
borrower's Direct Loans and the combined AGIs of both borrowers. 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 Briana, has a
total outstanding Direct Loan debt of $60,000 that is eligible for
repayment under the ICR plan, of which $40,000 belongs to John and
$20,000 to Briana, we would apportion 67 percent of the monthly ICR
payment to John and the remaining 33 percent to Briana. 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 and interest balance of the
loan at the time the loan entered repayment;
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 Loan that is
eligible for repayment under the ICR plan 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 expressed 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 expressed 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
1 by the result from Step 2.
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. In each of the examples, the Direct Loan
amounts represent the outstanding principal balance at the time the
loans entered repayment.
Example 1. Kesha is single with no dependents and has $15,000 in
Direct Loans that are eligible for repayment under the ICR plan. The
interest rate on Kesha's loans is 6 percent, and she has an AGI of
$35,153.
Step 1: Determine the total monthly payment amount based on what
Kesha 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 Kesha's AGI. In this example, an
AGI of $35,153 corresponds to an income percentage factor of 71.89
percent.
0.7189 x $146.38 = $105.23
[[Page 23992]]
Step 3: Now, determine the monthly payment amount equal to 20
percent of Kesha's 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 HHS Poverty Guideline
amount for a family of one from Kesha's AGI, multiply the result by 20
percent, and then divide by 12:
$35,153-$15,060 = $20,093
$20,093 x 0.20 = $4,018.60
$4,018.60 / 12 = $334.88
Step 4: Compare the amount from Step 2 with the amount from Step 3.
In this example, Kesha would pay the amount calculated under Step 2
($105.23), since this is the lesser of the two payment amounts.
Example 2. Paul is married to Jesse and they have no dependents.
They file their Federal income tax return jointly. Paul has a Direct
Loan balance of $10,000, and Jesse has a Direct Loan balance of
$15,000. Both of their Direct Loans are eligible for repayment under
the ICR plan and have an interest rate of 6 percent.
Paul and Jesse have a combined AGI of $99,285 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 Paul's and Jesse'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 Paul and
Jesse based on what both borrowers would pay over 12 years using
standard amortization. To do this, use the formula that precedes
Example 1. In this example, their 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 Paul and Jesse's combined AGI. In
this example, the combined AGI of $99,285 corresponds to an income
percentage factor of 109.40 percent.
1.094 x $243.96 = $266.90
Step 4: Now, determine the monthly payment amount equal to 20
percent of Paul and Jesse'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:
$99,285-$20,440 = $78,845
$78,845 x 0.20 = $15,769
$15,769 / 12 = $1,314.08
Step 5: Compare the amount from Step 3 with the amount from Step 4.
Paul and Jesse would jointly pay the amount calculated under Step 3
($266.90), since this is the lesser of the two amounts.
Step 6: Because Paul and Jesse are jointly repaying their Direct
Loans under the ICR plan, the monthly payment amount calculated under
Step 5 applies to Paul and Jesse's combined 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. Paul has a Direct Loan debt of $10,000 and Jesse has a
Direct Loan debt of $15,000. For Paul, the monthly payment amount will
be:
$10,000 / ($10,000 + $15,000) = 40 percent
0.40 x $266.90 = $106.76
For Jesse, the monthly payment amount will be:
$15,000 / ($10,000 + $15,000) = 60 percent
0.60 x $266.90 = $160.14
Example 3. Santiago is single with no dependents and has a combined
balance of $60,000 in Direct Loans that are eligible for repayment
under the ICR plan. Each of Santiago's loans has an interest rate of 6
percent, and Santiago's AGI is $41,828.
Step 1: Determine the total monthly payment amount based on what
Santiago 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 Santiago's AGI. In this example, an
AGI of $41,828 corresponds to an income percentage factor of 80.33
percent.
0.8033 x $585.51 = $470.34
Step 3: Now, determine the monthly payment amount equal to 20
percent of Santiago's 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 HHS Poverty Guideline
amount for a family of one from Santiago's AGI, multiply the result by
20 percent, and then divide by 12:
$41,828-$15,060 = $26,768
$26,768 x 0.20 = $5,353.60
$5,353.60 / 12 = $446.13
Step 4: Compare the amount from Step 2 with the amount from Step 3.
In this example, Santiago would pay the amount calculated under Step 3
($446.13), since this is the lesser of the two amounts.
Interpolation. If an AGI is not included on the income percentage
factor table, calculate the income percentage factor through linear
interpolation. For example, assume that Jocelyn is single with an AGI
of $50,000.
Step 1: Find the closest AGI listed that is less than Jocelyn's AGI
of $50,000 ($41,828) and the closest AGI listed that is greater than
Jocelyn's AGI of $50,000 ($52,536).
Step 2: Subtract the lower amount from the higher amount (for this
discussion we will call the result the ``income interval''):
$52,536-$41,828 = $10,708
Step 3: Determine the difference between the two income percentage
factors that correspond to the AGIs used in Step 2 (for this
discussion, we will call the result the ``income percentage factor
interval''):
88.77 percent-80.33 percent = 8.44 percent
Step 4: Subtract from Jocelyn's AGI the closest AGI shown on the
chart that is less than Jocelyn's AGI of $50,000:
$50,000-$41,828 = $8,172
Step 5: Divide the result of Step 4 by the income interval
determined in Step 2:
$8,172 / $10,708 = 76.32 percent
Step 6: Multiply the result of Step 5 by the income percentage
factor interval that was calculated in Step 3:
8.44 percent x 76.32 percent = 6.44 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 an AGI of $50,000:
6.44 percent + 80.33 percent = 86.77 percent (rounded to the
nearest hundredth)
The result is the income percentage factor that we will use to
calculate Jocelyn's monthly repayment amount under the ICR plan.
Attachment 3--Charts Showing Sample Income Contingent Repayment (ICR)
Plan 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 AGIs
[[Page 23993]]
under the ICR plan. The first chart is for a single borrower who has 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
calculations in Attachment 3 assume that the loan debt has an interest
rate of 6 percent. For the married borrower, the calculations assume
that the borrower files a joint Federal income tax return and that the
borrower's spouse does not have Federal student loans.
Sample First-Year Monthly Repayment Amounts for a Single Borrower
--------------------------------------------------------------------------------------------------------------------------------------------------------
Family size = 1
---------------------------------------------------------------------------------------------------------------------------------------------------------
AGI
Initial debt ----------------------------------------------------------------------------------------------
$20,000 $40,000 $60,000 $80,000 $100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
$20,000.................................................. $82 $152 $186 $196 $222
$40,000.................................................. 82 305 371 393 445
$60,000.................................................. 82 416 557 589 667
$80,000.................................................. 82 416 742 785 889
$100,000................................................. 82 416 749 981 1,111
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sample First-Year Monthly Repayment Amounts for a Married or Head-of-Household Borrower
--------------------------------------------------------------------------------------------------------------------------------------------------------
Family size = 3
---------------------------------------------------------------------------------------------------------------------------------------------------------
AGI
Initial debt ----------------------------------------------------------------------------------------------
$20,000 $40,000 $60,000 $80,000 $100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
$20,000.................................................. $0 $144 $185 $196 $214
$40,000.................................................. 0 236 369 392 428
$60,000.................................................. 0 236 554 588 643
$80,000.................................................. 0 236 570 783 857
$100,000................................................. 0 236 570 903 1,071
--------------------------------------------------------------------------------------------------------------------------------------------------------
[FR Doc. 2024-07263 Filed 4-4-24; 8:45 am]
BILLING CODE 4000-01-P