Beginning today, the federal government is offering a new student loan repayment plan option that is based on income. This plan, called the “Income Based Repayment” (IBR) plan, was created to make loan repayment affordable for students while considering their income and family size. If eligible for the program, individuals are required to make smaller monthly payments and may be able to have the balance of their loans forgiven after 25 years of repayments. You can read more about this repayment option here.
The IBR plan is similar to the existing “Income Contingent Repayment” (ICR) plan, but more generous. Under the ICR plan, monthly payments are based on an individual’s (plus their spouse’s, if applicable) adjusted gross income, family size, and total amount of loans due.
Individuals working in Public Service positions (including early education professionals), may be eligible to have their loans forgiven after 10 years of consecutive monthly payments. These individuals must have a ICR or IBR plan through the “Direct Loan” program and work in a public service position throughout all 120 payments. You can learn more about this opportunity here.