This blog post is the first in a series of 3 posts in which I address various repayment options available to student loan borrowers. Today I’ll discuss the “Income Based Repayment Plan”, known as the “IBR” plan.
As an Asheville student loan attorney I assist people who are overburdened with student loan debt. Student loans are rapidly becoming the burden of an entire generation. In fact, inability to repay student loans is impacting people of all ages, including older Americans who have gone back to school in their adult years and incurred student loan debt as a result.
As many people know, student loan debt is difficult to discharge in bankruptcy. Click here for a post I wrote on the subject of bankruptcy and student loans. Fortunately, there are non-bankruptcy options available.
If your student loan debt is large relative to your income then you may qualify for an Income Based Repayment Plan (“IBR”). An IBR is based on you having a partial financial hardship. You have a partial financial hardship if the months amount you would be required to pay on your IBR eligible federal student loans under a 10 year standard repayment plan is higher than the monthly amount that you would be required to pay under an IBR. Under an IBR your payment amount may increase or decrease year to year based on your income and family size.
Under an IBR your monthly payments are: (a) Based on your income and family size; (b) Adjusted each year if you have changes to your income and/or family size; (c) Are usually lower than under other repayment plans; (d) Never more than a standard 10 year repayment plan; and (e) Repaid over a period of 25 years.
Some student loan debts are NOT ELIGIBLE for IBR. These include:
- -PLUS loans made to parents
- -Consolidation loans that include underlying PLUS loans made to parents
- -Private education loans
- The following is a list of student loans that ARE ELIGIBLE for IBR:
- -Direct Subsidized Loans
- -Direct Unsubsidized Loans
- -Direct PLUS Loans made to graduate or professional students
- -Direct Consolidation Loans without underlying PLUS loans made to parents
- -Subsidized Federal Stafford Loans
- -Unsubsidized Federal Stafford Loans
- -FFEL PLUS Loans made to graduate or professional students
- -FFEL Consolidation Loans without underlying PLUS loans made to parents
Attorney Rod Kight is a student loan lawyer. At Kight Law Office we help people who are struggling with student loan debt. Please today to see if we can help you reduce or eliminate your student loan debt.