How do income-driven repayment plans for federal student loans operate and what impact can they have on credit?

• A. Payments are set as a fixed amount that does not change with income.
• B. Payments are set as a percentage of income; can be lower; timely payments support credit; default triggers major negative impacts.
• C. Payments are suspended after a fixed period and have no impact on credit.
• D. They affect only the interest rate and do not influence payment amounts.

Answer: (B)