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The Income-Based Repayment (IBR) program caps monthly federal loan payments at an affordable level based on your income and family size, and forgives any debt and interest that remains after 25 years. If you owe more on your federal student loans than you earn in a year, you can probably benefit from IBR – the lower your income, the lower your monthly payment will be. This responsible repayment option will likely require a longer repayment period. IBR is available for almost all federal loans – past, present, or future – made by any lender, whether for college or graduate school.
If you work in a government, nonprofit, or other public service job, you could have your remaining student loan debt forgiven after just 10 years of Income-Based Repayment, or certain other payment types. Your loans have to be in the federal Direct Loan Program to qualify, but the 10 years don’t have to be consecutive. You just need to make a total of 120 payments while working full-time for a public or nonprofit employer, starting on or after Oct. 1, 2007.
Additional information, including a simple calculator to estimate monthly payments, answers to frequently asked questions, and a video explaining the program is available on the IBR website.
Updated: 08/17/10
