Drowning in student loan debt? Help is here

What is the new Federal Student Loan Income Based Repayment (IBR) program?

iStock_000003637738XSmallIf you are one of the millions of us drowning in huge federally guaranteed student loan debt, and burdened with high monthly payments we can’t afford, there may be help out there for us. A new federal program called Income Based Repayment (IBR) began July 1, 2009. Income guidelines have to be met in order to qualify. Loans in default do not qualify.

Monthly student loan payment amount is based on income, and family size using the 2009 150% HHS Poverty Guidelines by Family Size. See the guidelines below to find out if you may qualify.

For most eligible student loan borrowers, IBR monthly student loan payments will be less than 15% of family income, and possibly even lower for very low income earners, or no income borrowers.

Please check with your student loan lender or student loan service representative to find out if you qualify.

Student loans that may qualify for the program:

  • Direct loan programs
  • Guaranteed or FFEL loan programs
  • Stafford student loans (subsidized and unsubsidized)
  • Perkins loans consolidated into federal Guaranteed (FFEL) or Direct loans.
  • Grad PLUS loans
  • Consolidated Stafford and Grad PLUS loans (if not combined with Parent PLUS loans)
  • Loans borrowed before or after IBR was created

Student loans that do not qualify:

  • Parent PLUS loans
  • Private loans
  • Loans in default

There is also a program called Public Service Loan Forgiveness. Ask your student loan lender, or student loan service representative how it works. Watch the short, less than 3 minute, entertaining, and informative video below to learn more about Income Based Repayment (IBR):

150% of 2009 HHS Poverty Guidelines by Family Size

Number of Persons in 48 Contiguous Alaska Hawaii
Family or Household States and D.C.

1 $16,245 $20,295 $18,690

2 $21,855 $27,315 $25,140

3 $27,465 $34,335 $31,590

4 $33,075 $41,355 $38,040

5 $38,885 $48,375 $44,490

6 $44,295 $55,395 $50,940

7 $49,905 $62,415 $57,390

8 $55,515 $69,435 $63,840

For each additional
person add: $5,610 $7,020 $6,450

For more information visit ibrinfo.org

Please practice financial responsibility, good financial stewardship, and due diligence. Be informed, and aware that as great as this new IBR program sounds, and as much as it could help our current financial situation, there is also the possibility that opting into this program could adversely affect your credit rating, and lower your credit score. Ask your student loan lender, or loan service representative how it will be reported to Equifax, Experian, TransUnion, and Innovis credit bureaus, and if it will negatively affect credit rating, or credit score.

One Comment

  1. StopWreckingMyLife

    I have requested my 3 credit scores only to learn that I have college funds that are owed for months that I was not attending school. I cannot obtain a copy of my reports. There’s a freeze on one and no one will tell me anything. My credit is shot because of theft, I can’t get a job because of this and no one will help me. I only hope that those who keep up this behavior end up worse off than I already am.


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