; (ii) for a period not to exceed 3 months, due to unusual circumstances that disrupt the borrower’s ability to make timely payments on the loan; or (iii) renewable at 12-month intervals for a period not to exceed 3 years, due to documented extreme economic hardship on the part of a borrower. (2) Prepayment authorized A borrower shall have the right to prepay all or part of such loan, at any time and without penalty. Any such prepayment amount shall be applied in accordance with section 455(r)(3)(C). (3) Determination of income-Based repayment obligation (A) In general The repayment obligation under this section with respect to an individual for any taxable year is an amount equal to 10 percent of the amount of the gross income of the borrower for the taxable year that exceeds the exemption amount under subparagraph (C). (B) Exclusion of certain amounts paid on behalf of individual Any amount paid on the borrower's behalf under subsection (c)(1)(D) shall not be taken into account in determining such borrower's income-based repayment obligation. (C) Exemption amount For purposes of this section, the exemption amount with respect to an individual shall be $10,000 (adjusted each year to reflect changes in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor for the most recent 12-month period for which such data are available). (D) Individuals not filing a return The income-based repayment obligation with respect to an individual not required to file a return under section 6012(a)(1) of the Internal Revenue Code of 1986 shall be treated as zero. .