If you’re one of the millions of federal student loan borrowers, you may be eligible for a variety of flexible repayment options available from the U.S. Department of Education, including some that set your monthly payment based on your income. These income-driven repayment plans cover most types of federal student loans, and cap your required monthly payment at an affordable amount based on your income and family size.
TurboTax is proud to be part of an innovative public-private collaboration with the U.S. Department of the Treasury and the U.S. Department of Education to raise awareness about student loan income-driven repayment plans, and to connect our customers to the best tools and information that can help them reduce monthly payments and make student loan debt more manageable.
TurboTax customers can create an account or log into their existing MyTurboTax account and easily access the Department of Education’s Repayment Estimator. The Repayment Estimator allows borrowers to determine if they could reduce their monthly student loan payments through an income-driven repayment plan. The Estimator takes into account factors like income and family size to calculate your monthly payment amount under different plan options.
From there, qualifying borrowers can learn more and apply for an income-driven repayment plan. Once enrolled in an income-driven plan, you will need to be recertified for eligibility every year, and your payment amount may increase or decrease each year based on your income and family size. The income-driven plans extend the repayment period for up to 25 years, and they also provide for forgiveness of any remaining loan balance at the end of the repayment period, if the borrower is in good standing. For more information about income-driven repayment plans, click here.
Tax filing season provides the ideal opportunity for all Americans to take a big picture look at their personal finances, including the amount of student loan principal and interest paid throughout the year, and to consider the repayment options that best meet their family’s needs.
We’re excited to work with the Departments of Treasury and Education to bring you more ways to manage your money.