There are some remedies to help student loan borrowers with their debt, and one of them is the Income Based Repayment Plan.
Income Based Repayment, or IBR, is a repayment plan that lowers your student loan payments based on your current income and family size.
You must have a partial financial hardship to qualify for Income Based Repayment. Every year, you must submit current info about your income and family size; as these things change, your payment will change too (so if you have more children, your payment will go down, and if your income increases, your payment will go up).
Most federal student loans are eligible for IBR plans; only PLUS loans and private loans are ineligible.
Under an IBR, you make regular monthly payments for 25 years. At that point, the remaining debt is forgiven. Under this plan, you also would qualify for public service loan forgiveness (PSLF), which means your debts are forgiven after 10 years of regular payments.
- Read more about public service loan forgiveness here: Student Loan Forgiveness is Possibly on the Horizon
It’s important to note that loans that are in default do not qualify for payment plans like Income Based Repayment, so it’s crucial that you make all of your student loan payments on time and in full if you hope to qualify for any kind of debt relief.
For more information, you may visit the official Federal Student Aid website: http://www.studentaid.ed.gov/repay-loans/understand/plans/income-based
How we can help you with Income Based Repayment
Student loan debt is tricky for us, since it is not traditionally included in a debt management plan, and cannot be discharged in bankruptcy.
The best thing we can do to help our clients make their student loan payments successfully is help them address their other debts, like credit cards. Our counselors can help lower those payments and accelerate the payoff of credit card debt, which frees up income to put toward student loans.
For a free, confidential counseling session, contact us today.