The Income-Based Repayment (IBR) program is a new repayment program for borrowers in the Federal Student Loan Program initiated by the U.S. Department of Education as of July 1, 2009.
1. The IBR caps borrowers' monthly loan payments at 15 percent of their discretionary income (that is, 15 percent of what a borrower earns above 150 percent of the poverty level for their family size).
2. Any current or future borrower whose loan payment exceeds 15 percent of his or her discretionary income is eligible.
3. After 25 years in the program, borrowers' debts will be completely forgiven. Borrowers with hefty debt or low-paying jobs are most likely to qualify for the program.
4. IBR will cover all federal loans -- both Direct and FFELP -- made to students, including Stafford, Grad PLUS and federal consolidation loans, but not those made to parents (PLUS loans). Perkins Loans are also eligible if a borrower consolidates them into a FFEL or Direct Loan.
Ramon L. Rodriguez
Financial Aid
02/04/2010 |