Income-Based Repayment (IBR) is a new method for repaying your federal student loan debt. Available July 1, 2009, it will help make loan payments more manageable by calculating your payment amount based on your adjusted gross income (AGI) and family size. In order to qualify, you must demonstrate a partial financial hardship (PFH), and if you do, your payments will be capped at 15% of your discretionary income. While under this plan, your situation will be evaluated annually to determine if your PFH has continued. There are additional benefits, such as, restricted capitalization, loan forgiveness, and interest subsidies that may also be available while on this repayment plan.
This chart shows estimated examples of the maximum IBR monthly payment amounts using a range of incomes and family sizes. The maximum payment amount in an IBR plan is calculated as 15% of your discretionary income (your adjusted gross income minus 150% of the poverty guideline based on your family size and state of residence).
IBR Monthly Payment Amount
| Annual Income |
Family Size |
| |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
| $10,000 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
| $15,000 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
| $20,000 |
$47 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
| $25,000 |
$109 |
$39 |
$0 |
$0 |
$0 |
$0 |
$0 |
| $30,000 |
$172 |
$102 |
$32 |
$0 |
$0 |
$0 |
$0 |
| $35,000 |
$234 |
$164 |
$94 |
$24 |
$0 |
$0 |
$0 |
| $40,000 |
$297 |
$227 |
$157 |
$87 |
$16 |
$0 |
$0 |
| $45,000 |
$359 |
$289 |
$219 |
$149 |
$79 |
$10 |
$0 |
| $50,000 |
$422 |
$352 |
$282 |
$212 |
$141 |
$71 |
$0 |
| $55,000 |
$484 |
$414 |
$344 |
$274 |
$204 |
$134 |
$64 |
| $60,000 |
$547 |
$477 |
$407 |
$337 |
$266 |
$196 |
$126 |
| $65,000 |
$609 |
$539 |
$469 |
$399 |
$329 |
$259 |
$189 |
| $70,000 |
$672 |
$602 |
$532 |
$462 |
$391 |
$321 |
$251 |
If the estimated IBR Monthly Payment Amount above is LESS than what you would be scheduled to pay under a standard 10-year repayment plan, then you should be eligible for IBR.
If you think IBR may be right for you, contact us with any questions.
Important Forms
Forms should be returned by fax or mail according to the instructions on the form.
IBR Plan request form (PDF) - use this form to apply for IBR
In addition to completing and returning the IBR Plan request form, you will also need to send us a copy (front and back) of the first two pages of your most recently filed tax return. Make sure that the copy of your tax return includes your signature. If you filed electronically, you will need to print a copy of your return, sign it, and send it in.
IBR Alternative Documentation of Income form (PDF) - you should complete this form to provide proof of your income if:
- You did not file taxes last year (you will need to send a written statement that you were not required to file taxes for the previous tax year), or
- Your most recently filed federal tax return does not reasonably reflect your current income (you will need to send us a signed copy (front and back) of the first two pages of your most recently filed tax return)
If you meet either of the conditions above and are submitting the IBR Alternative Documentation of Income form, you will also need to complete the IBR Plan request form and return both forms, along with any other required documentation, in order for us to review your request.
Here are some key terms associated with IBR:
Adjusted Gross Income (AGI): The borrower’s adjusted gross income as reported to the Internal Revenue Service (IRS). For a married borrower filing jointly, AGI includes both the borrower’s and spouse’s income, and for a married borrower filing separately, only the borrower’s income.
Family Size: The number that is determined by counting the borrower, the borrower’s spouse, and the borrower’s children, including unborn children who will be born during the year the borrower certifies family size, if the children receive more than half of their support from the borrower. A borrower’s family size also includes other individuals if, at the time the borrower certifies family size, the other individuals live with the borrower and receive more than half their support from the borrower and will continue to receive support from the borrower for the year the family size is certified. Support includes money, gifts, loans, housing, food, clothes, car, medical and dental care, and payment of college costs.
Partial Financial Hardship (PFH): A circumstance in which the annual aggregate amount due on all of a borrower’s eligible FFEL and Direct loans, as calculated under a standard repayment plan based on a 10-year repayment period at the time the borrower initially entered repayment, or the amount owed when the borrower selects the IBR plan, whichever is greater, exceeds 15% of the difference between the borrower’s adjusted gross income and 150% of the poverty line for the borrower’s family size.
Poverty Line Income: The income categorized by State and family size in the Poverty Guidelines published annually by the United States Department of Health and Human Services (HHS) pursuant to 42 U.S.C. 9902(2). If a borrower is not a resident of a State identified in the Poverty Guidelines, the borrower’s family line income is the income used for the 48 contiguous States.