The Income Based Repayment (IBR) is a new program created by Congress which reduces student loan payments based on your income similar to the Sallie Mae graduated payment program and was a result of the College Cost and Reduction Access Act of 2007. Annual student loan payments under IBR are capped at 15% of the borrower's income (adjusted gross income minus 150% of the poverty level for the borrower’s family size).
The IBR went into effect on July 1, 2009. Graduating seniors of the Class of 2009 are eligible for IBR within 2 months of graduation. Those who previously graduated or graduated before IBR took effect will have to wait to become eligible for IBR.
All federal student loans are eligible for the IBR program including subsidized and unsubsidized Federal Stafford loans; Federal Grad PLUS loans and Federal Direct Consolidation loans.
Another option to help pay federal student loan debt is loan forgiveness. Only Federal Direct loans (including Federal Direct Consolidation loans) are eligible for student loan forgiveness for public service.
Beginning October 1, 2007, borrowers who have Federal Direct loans may begin counting time in public service. Borrowers who have already consolidated their loans outside of Federal Direct must wait until July 1, 2008 to be eligible to "reconsolidate" into Federal Direct and begin counting time in public service.
For more information visit the Finaid website or Department of Education website.
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