Income-Based Repayment (IBR) Plan

If you have high student debt levels relative to your adjusted gross income, you may be eligible to apply with your loan servicer for this new plan.

If your federal student loan debt is high relative to your adjusted gross income and family size, you may be eligible for the Income-Based Repayment plan. Your federal loan servicer will perform the calculation to determine your eligibility; however, you can view the Department of Education's IBR calculator to see if you may benefit from this plan. It uses your adjusted gross income, family size, and state of residence to calculate an estimated IBR monthly payment amount.

If you are eligible for IBR, your monthly payment is capped and may be adjusted each year based on changes in your income and family size. Your monthly payment will never be more than the standard 10-year payment amount as long as you remain in the program. The maximum repayment period is 25 years, and borrowers who still have a remaining balance after 25 years may be eligible for loan forgiveness.

Since your monthly payments will be lower under this option, the total cost of the loan will be higher than under a standard repayment plan. However, this option may be right for you if you are having trouble making your monthly payments. Be sure to choose the plan that makes sense for you.

For more information on the Income-Based Repayment Plan, click here.