- What is an Income-Based Repayment Plan?
Effective July 1, 2009 the Income-Based Repayment (IBR) plan is a new repayment option for federal student loan borrowers. Under IBR, your student loan payments are intended to be affordable based on your income and family size. IBR caps your monthly payment amount at 15% of your discretionary income. To be eligible for IBR, you must demonstrate partial financial hardship.
- What is the repayment period under an Income-Based Repayment Plan?
The maximum repayment period for loans under the IBR plan is 25 years. Borrowers who have not repaid their entire loan balance after 25 years may be eligible for loan forgiveness, which means the federal government will cancel the remaining loan balance. If you are currently in repayment and wish to speak to someone about possibly changing your repayment plan to the IBR plan, contact your current servicer or lender. For more information about repayment plans please visit the Department of Education website at: http://studentaid.ed.gov/PORTALSWebApp/students/english/OtherFormsOfRepay.jsp