Income Sensitive Repayment - ISR

Your buddy Repayment Jones doesn't like to talk about how much money he makes. He's very sensitive about financial matters. He's an Income Sensitive Repayment.

Also, the term refers to a way to help low-income families afford loans. Lenders working with the Federal Family Education Loan Program, or FFELP, use income sensitive repayment as an alternative technique to calculate an appropriate monthly payment for a loan repayment.

Using ISR, lenders fix repayment at a percentage of the borrower’s income. The rate is set somewhere in the wide range between 4% and 25% of the person’s gross earnings. The exact amount depends on the loan and the circumstances. However, the monthly payment has to at least meet the amount of interest accruing.

Income figures are confirmed through W-2s and tax returns.