Income-Based Repayment (IBR) is a repayment plan for the major types of federal student loans that caps your required monthly payment at an amount intended to be affordable based on your income and family size.
All Stafford, PLUS and Consolidation Loans made under either the Direct Loan or FFEL Program are eligible for repayment under IBR, except loans that are currently in default, parent PLUS Loans (PLUS Loans that were made to parent borrowers), or Consolidation Loans that repaid parent PLUS Loans. The loans can be new or old, and for any type of education (undergraduate, graduate, professional, job training).
You may enter IBR if your federal student loan debt is high relative to your income and family size. While your loan servicer will perform the calculation to determine your eligibility, you can use the U.S. Department of Education’s IBR calculator to estimate whether you would likely qualify for the IBR plan. The calculator looks at your income, family size, and state of residence to calculate your IBR monthly payment amount. If that amount is lower than the monthly payment you would be required to pay on your eligible loans under a 10-year standard repayment plan, based on the greater of the amount you owed on your loans when they initially entered repayment or the amount you owe at the time you request IBR, then you are eligible to repay your loans under IBR.
If you are married and you and your spouse file a joint federal tax return, and if your spouse also has IBR-eligible loans, your spouse’s eligible loan debt is taken into account when determining whether you are eligible for IBR. In this case, the required monthly payment amount under a 10-year standard repayment plan is determined based on the combined amount of your IBR-eligible loans and your spouse’s IBR-eligible loans, using the greater of the amount owed when the loans initially entered repayment or the amount owed at the time you or your spouse request IBR. If the combined monthly amount you and your spouse would be required to pay under IBR is lower than the combined monthly amount you and your spouse would pay under a 10-year standard repayment plan, you and your spouse are eligible for IBR.
If this is all very confusing to you and you would like to learn more about IBR in a practical and easy-to-use website, please visit http://www.askheatherjarvis.com to view webinars and get practical information on this process. Heather Jarvis, the creator of this site, is a student loan expert and helps students with loan repayment issues on a daily basis.
IBR Info is an independent, nonprofit source of information about new federal student loan payment and forgiveness programs.
IBRinfo has been working with student and consumer groups to make this process work better for borrowers, including requiring lenders to notify borrowers in advance and preventing borrowers from being penalized for servicing delays. As a result, the Department of Education will soon publish draft rules intended to address these issues.
Employment Certification for Public Service Loan Forgiveness: Now You Can Track Your Eligibility
In January 2012, the Department of Education issued the long-awaited Employment Certification Form for Public Service Loan Forgiveness (PSLF). Direct Loan borrowers who work in the public and nonprofit sectors can now get confirmation that their job counts as qualifying employment for PSLF. Using this form will make it much easier to track your eligibility, know when it's time to apply for forgiveness, and have the paperwork you need in hand.
Visit the Federal Student Aid website for the Employment Certification instructions, fact sheet, and form.
For more information, check out the Department of Education's Special Consolidation Loan resource page.