Learn About the Income Based Replayment Plan (IBR) for Federal Student Loans

"What is the new Income Based Repayment (IBR) Plan for federal student loans?"

The Income Based Repayment (IBR) is a new repayment plan designed to make repaying federally guaranteed student loans easier. It takes your income and family size into consideration and adjusts your minimum monthly payment accordingly. The intent is to make monthly payments affordable.

"When does IBR take effect?"

July 1, 2009.

"Who can apply to the IBR?"

Anyone who has taken out certain major federally guaranteed loans can apply. These loans would be Stafford, Grad PLUS or Consolidation loan made under either the Direct Loan or FFEL program. It doesn't matter whether your federal student loan is old or new, whether you took it our for undergraduate, graduate, professional, or job training: you can apply.
Note: Federal student loans that are in default, parent PLUS Loans, or consolidation loans that repaid a parent PLUS Loan are NOT eligible for IBR.

"How can IBR benefit me?"

Under IBR, you could enjoy significantly lower monthly loan repayments if your federal student loan debt is high relative to your income and family size. Your monthly IBR payment amount is calculated based on your income, family size and state of residence. If the IBR amount is less than the monthly payment under a standard 10-year repayment plan, then you are eligible to repay your loans under IBR.

"Where can I find an IBR calculator?"

It's actually your lender who will perform the calculation to determine IBR eligibility, not the government. However, you can use the government's IBR calculator to estimate whether you are likely to benefit from the IBR plan.

Click here to see a chart that shows the maximum IBR monthly payment amounts for 2009, using a sample range of incomes and family sizes.

For a PDF of this information, go to http://studentaid.ed.gov/students/publications/factsheets/factsheet_IncomeBasedRepayment.pdf.