The Income Based Repayment Plan (or IBR as it is mostly referred to) is the most widely available income driven repayment plans for borrowers with Federal Student Loans. This plan takes into account what borrowers adjusted gross income, family size and state of residence. The major difference between this repayment plan and some of the others is that it requires a financial hardship in order to qualify. The Income Based Repayment plan is a qualifying repayment plan and will make you eligible for possible loan forgiveness.
This repayment plan is available to borrowers who have Direct or FFEL Loans, and covers most types of Federal Loans taken out by students, but not the ones taken out by their parents (Parent-Plus). It is made affordable by using a sliding scale that determines how much the borrower can afford to pay every month. If you earn below 150% of the poverty level for your family size, your loan payment will most likely end up being $0. If you earn more than that, your payment will be capped at 15% of whatever you earn above that amount. This repayment plan requires annual re-certification which may cause your monthly payment to change depending on the previous year’s adjusted gross income and family size.
We want to assure you that our primary objective is to help you understand the options available to you in repaying your student loan debt. Our organization, which is a nonprofit Consumer Credit Counseling Organization has over twenty years of experience helping individuals live debt free and understand their complete financial picture. The consultation is free and the help and guidance we’ve provided individuals throughout the years has been invaluable. We encourage you to learn more about our organization by visiting Debt Reduction Services or calling us toll free at 1-877-688-3328. Our certified student loan counselors are ready to help you today!