Help is here!
Income-Based Repayment (IBR) is a new way to make your federal student loan payments more manageable. And if you're a teacher or work in government or at a nonprofit (501(c)(3)) organization, you might qualify for a new type of public service loan forgiveness (PSLF) after 10 years of eligible payments and employment.
IBR News and Events
New Steps by Obama Administration to Help Student Borrowers
On October 25, 2011, the Obama Administration announced important and timely new steps to help struggling student loan borrowers. The White House introduced the "Pay As You Earn" proposal which will allow up to 1.6 million current students to cap their loan payments at 10 percent of their income starting as early as next year, with forgiveness after 20 rather than 25 years of responsible payments, and the proposal that will give borrowers the chance to better manage their student debt by consolidating their federal student loans into a single Direct Consolidation loan and receive an interest rate reduction of up to 0.5 percent.
Read our statement about the announcement
Click here to read the White House fact sheet "Help Americans Manage Student Loan Debt"
Click here for more information about Special Direct Consolidation Loans
Fixes to Income-Based Repayment Effective July 1, 2010
Two important changes to Income-Based Repayment went into effect on July 1, 2010. As a result, some people are eligible for IBR who were not before. If you are already using IBR, are married, file taxes jointly with your spouse, AND your spouse also has federal loans, contact your lender about updating your payment plan to reflect this change.
Some IBR Payments Calculated Incorrectly
In some cases -- how many remains unclear -- the current contractor for Direct Loan Servicing incorrectly based IBR payments on the borrower's gross income (total income) instead of his or her lower Adjusted Gross Income (AGI, or taxable income). As a result, these borrowers' monthly IBR payments are higher than they should be.
The U.S. Department of Education posted in-depth Q&As on both Income-Based Repayment (IBR) and Public Service Loan Forgiveness (PSLF) to their website. While some of the topics are also covered in our FAQ, we highly recommend that you read the Department’s as well if you have any questions about IBR or PSLF. We strongly encouraged the Department to provide this important information, and we’re very pleased that clear and thorough official answers to common questions are now available.
