IBR is a new student loan repayment program started in July of 2009. The fact is that in college students often take out more student loans than they can handle. But there are no repayment requirements until after graduation. This may result in a serious pile of debt. Once a student graduates, the payments may take all of their initial career earnings.
This can be a huge problem and keep people under the poverty line. It can result in children going without. It can also destroy relationships and marriages. It can prevent people from achieving their potential because they are spread too thin.
To deal with this issue, the federal government developed IBR. IBR means income based repayment. The program sets your payments using factors like income and the size of your family. This helps borrowers stay above the poverty line and provide for their families.
IBR is a great way for many people to repay student loans. The programs provides repayment options that are feasible. There are some other very attractive aspects to IBR. For example, you have the option of remaining in IBR for 25 years. You may be able to have your debt cancelled at the end of this term.
Not surprisingly there is some paperwork involved in IBR. The program requires a yearly evaluation of your income. The size of your family might also change. But your payments will never exceed 15 percent of the amount over the poverty level you earn. Of course at some time you may be below the poverty level for your family size. In this case you pay nothing. This helps keep your debt under control.
A lot of people want to learn more about IBR. They may not investigate because they think that their participation in other programs makes them ineligible. However many programs are fully compatible with IBR. It is not likely that you would lose ground by switching over. Also, participating in IBR does not rule out student loan forgiveness. You can participate in IBR and still be eligible for forgiveness based on public service.
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