Repayment Plan

Income Based Repayment (IBR)

Income-Based Repayment (IBR) is designed to reduce monthly payments to assist with making your student loan debt manageable. If you need to make lower monthly payments, this plan may be for you.

Advantages of IBR

  • Pay based on what you earn: Your monthly payment amount will be 15 percent of your discretionary income, will never be more than the amount you would be required to pay under the Standard Repayment Plan, and may be less than under other repayment plans.
  • Interest payment benefit: If you’re monthly IBR payment amount does not cover the interest that accumulates on your loans each month, the government will pay your unpaid accrued interest on your Direct Subsidized Loans or Subsidized Federal Stafford Loans for up to three consecutive years from the date you began repaying your loan under IBR.
  • Limitation on the capitalization of interest: While you have a partial financial hardship, interest that accrues but is not covered by your loan payments will not be capitalized, even if interest accrues during a deferment or forbearance.
  • 25-year forgiveness: If you repay under IBR and meet certain other requirements, any remaining balance will be forgiven after 25 years of qualifying repayment.
  • 10-year Public Service Loan forgiveness: If, while you are employed full-time for a public service organization, you make 120 on time, full monthly payments under IBR (or certain other repayment plans) you may be eligible to receive forgiveness of the remaining balance of your Direct Loans through the Public Service Loan Forgiveness Program.

IBR Monthly Payments

Under this plan, your monthly payments are:

  • Based on your income and family size;
  • Adjusted each year, based on changes to your annual income and family size;
  • Usually lower than they are under other plans;
  • Never more than the 10-year standard repayment amount; and
  • Made over a period of 25 years.