IBR is one of the newest student loan repayment programs. In college students may take out student loans that are larger than they can handle. But there are no repayment requirements until after graduation. This can result in major debt. After graduation, a student may find that the monthly payments are more than their new salary.
This is problematic because it keeps people below the poverty level. It can result in children going without. In addition it destroys relationships and marriages. People in this kind of debt may never achieve their potential because they are spread too thin.
The federal government created a program called IBR to deal with this issue. The abbreviation 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. It has initiated viable repayment options. There are additional attractive elements to IBR. For example, you might stay in the program as long as 25 years. Your debt may be cancelled at the end of this term.
It should not be surprising that there is some paperwork involved in IBR. The program requires a yearly evaluation of your income. Of course the size of your family can change too. The good news is that your payments will not exceed 15 percent over the amount that you earn over the poverty line. It is possible that at some point you may be below the poverty level for your family size. If this happens you pay nothing. This will help keep your debt under control.
Lots of people are interested in participating in IBR. They fear that they cannot because they are already in other programs. However lots of programs will actually send IBR your credit with them. So it’s unlikely you would lose ground by switching over. In addition, you can belong to IBR and work for student loan forgiveness. You can still get forgiveness based on public service while paying through IBR.
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