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Income Based Repayment Program

September 12, 2011

Income Based Repayment Program

The Income Based Repayment Program (IBR) is a fairly new concept for federal loan payment, and is an awesome addition to to traditional repayment program options. A basic definition of the Income Based Repayment Program is your monthly payment is based off a percentage of your monthly income, usually being around 15 to up to 20 percent, and can be used no matter what age your loan is as well as what type of education it was for.

This option of repayment doesn’t have any income requirements so you can use it for any income you earn. It can also be catered around your family size as well. The below information will provide you of an overview about qualifying loans as well as all the major details Income Based Repayment Program with the pros and cons.

income based repayment program

 

Income Based Repayment Program Eligibility

There are certain federal loan programs that are eligible for Income Based Repayment, and some are not. Here are the qualifying loan options that one cna use for IBR as well as the ones that do not qualify:

Qualifying Loans

  • Federal Stafford Loans.
  • PLUS Loans as well as loans in cosolidation if they are part of the Direct Student Loan Program as well as the FFEL Student Loan Program.

Non Qualifying Loans

  • Defaulted student loans.
  • Parent PLUS Loans as well as consolidated Parent PLUS Loans.

As far as personal qualifcations go for the Income Based Repayment Program, your payments start out higher if you have no kids and get lower if you have one or more children, getting lower for each child you have. These payments are changed if income and family size change. Here is an example of how this works:

  • 50,000 income level – 1 child – $421, 2 children – $349, 3 children – $278, 4 children – $206, 5 children – $134, 6 children - $63 and 7 children – $0.

Income Based Repayment Program Pros & Cons

Pros

  • You can start out with little or no payments, which can be great when you first get out of college and are looking for a job, and as your pay advances so can your payments, making your repayment period get shorter.
  • If after 25 years you still have debt on your student loans, you may be able to qualify for cancellation of whatever sum is left.
  • If you have Stafford Subsidized Loans (income based loans) and your Income Based Repayment Program total amount you pay doesn’t equal your interest payments, the government will pay for whatever builds up in the form of interest on your loans for up to a three year period from when you first began IBR.
  • You can also use student loan forgiveness with public service jobs where you work for 10 years and make 120 on time payments in which at the end of this period, whatever is left on your loan debt will be wiped away on certain loans. This option is available for Direct Loans as well as consolidating FFEL Loans.

Cons

  • You have to up date you information each year, proving what your income as well as family size is and any changes that have came up during the last year in either category. Not providing this information each year will result in your repayment automatically being placed in a standard repayment which is where you have to pay a monthly fee that will fully pay off your loan debt in 10 years.
  • Being that Income Based Repayement Program usually comes with a lot lower payments, this will extend the repayment period which will result in more interest payments.

Using Income Based Repayment Program

If you are interested in taking advantage of the Income Based Repayment Program, you will have to contact the servicer of your loans who take into account your information and altimately determine what payment amount you are eligible for.

Student Loan Repayment Program Options

August 30, 2011

Student Loan Repayment Program Options

If you are looking for a great student loan repayment program, then you are in the right place as this aricle will list off many of the different repayment programs you can use to pay off your student loans. These programs will cater to whatever you can afford as well as range in different lengths of time in which you can repay your loans, which will be listed below. If by chance you can to this Student Loan Repayment Program page and were looking for student loan forgiveness programs, which are often times confused with repayment, click on the blue link that says “student loan forgiveness”.

Student Loan Repayment

 

Student Loan Repayment Program - 5 Different Options

  1. Level/Standard Student Loan Repayment Program – This option is the most used out of all of them, where you pay a monthly payment which starts as low as 50 dollars and it stays that way until your loans are fully paid off. These plans are usually set at a 10 year repayment period.
  2. Extened Student Loan Repayment Program – This plan is for those who are in a pinch financially and are looking for lower payments. Lower payments are available through this student loan repayment progam option because the length of repayment is extended from the regular 10 years to ranging from 12 years to up to 30 years with payments as low as 5 dollars.
  3. Graduated Student Loan Repayment Program – This option allows one to start off with lower payments in the beginning of loan repayment but increases every two years thereafter. This plan is set as a way for students to get their first job where pay will be a little lower, and as the get raises and better income opportunities, the payments will go up. These plans are generally set as well for 12 to 30 years.
  4. Income Contigent Student Loan Repayment Program - This option is has many similarities as the Graduate repayment progam being that it increases after a certain timeframe. This option allows one to start out by paying as low as 5 dollars if that is all your income permits and is fully based off 15 percent of your income. The great perk with this student loan repayment progam is that if your loans total above 50,000 dollars, you can pay your loan payments for 25 years, then after 25 years is up, whatever is left on your loan will be eliminated.
  5. Student Loan Forgiveness – This student loan repayment program method can provide you with student loan relief in the form of either a percentage off every year you work, or lump payments you can use towards your loan each year of service and can be utilized by working public service jobs, jobs where the area is low income or volunteer work.

Student Loan Repayment Program – Conclusion

Some loans are limited to the different student loan repayment program methods above as well as forgiveness programs. To learn about what is available to your particular situation, you should inquire about it through your student loan lender who can give you more information. Another way that you can check out is consolidation which can offer an extended student loan repayment program as well as grouping all of your loans into one lump loan payment.