What is IBR?

Income-Based Repayment is a new repayment plan that can help you manage your student loan debt by lowering your monthly payments. IBR will help make loan payments more manageable by calculating your payment amount based on your adjusted gross income (AGI) and family size.

In order to qualify, you must demonstrate a partial financial hardship (PFH), and if you do, your payments will be capped at 15% of your discretionary income. While under this plan, your situation will be evaluated annually to determine if your PFH has continued. There are additional benefits such as restricted capitalization, loan forgiveness, and interest subsidies that may also be available while on this repayment plan.

If you think IBR may be right for you, contact us by email or call us at 1-800-337-6884 to see if you qualify. IBR will be available for borrowers beginning July 1, 2009.

When will IBR be available?

You may request the Income-Based Repayment plan at any time on or after July 1, 2009.

Which borrowers and loans are eligible for this repayment plan?

All borrowers are eligible for this plan as of July 1, 2009, for repayment on Stafford, GradPLUS, and consolidation loans. Parent PLUS loans and consolidation loans that include Parent PLUS loans are not eligible for IBR.

How are payments calculated under IBR?

Monthly payments are calculated as 1/12th of the following:

15% x [AGI - (150% poverty line applicable to family size)]

Are defaulted loans held by the guarantor eligible for IBR?

No, defaulted loans held by guarantors are not eligible for IBR. If a defaulted loan is rehabilitated and repurchased by a Title IV lender, however, that loan then becomes eligible for IBR.

What is adjusted gross income (AGI)?

AGI is the borrower’s adjusted gross income as reported to the Internal Revenue Service (IRS). For a married borrower filing jointly, AGI includes both the borrower’s and spouse’s income, and for a married borrower filing separately, only the borrower’s income.

What is family size?

Family size is determined by counting the borrower, the borrower’s spouse, and the borrower’s children, including unborn children who will be born during the year the borrower certifies family size, if the children receive more than half of their support from the borrower.

A borrower’s family size also includes other individuals if, at the time the borrower certifies family size, the other individuals live with the borrower and receive more than half their support from the borrower and will continue to receive support from the borrower for the year the family size is certified.

Support includes money, gifts, loans, housing, food, clothes, car, medical and dental care, and payment of college costs.