Income based repayment is actually the alternate of income sensitive repayment (ISR) and income contingent repayment (ICR). Income based repayment plans are for students who are stuck in low paying jobs or have chosen careers which are fulfilling but not financially. The way this plans helps such students is by capping their monthly payments at a certain percentage of the students discretionary income, which is according to their income and family size, and not the loaned amount.