Need Lower Student Loan Payments? Sign up for Income Based Repayment

A new payment option for federal student loans will go into effect in July 2009. Known as Income-Based Repayment (IBR), the program will cap loan payments based on income and family size.

Who Can Use It:

• Federal student loan borrowers with direct or guaranteed student loans
• Students with Stafford, Grad Plus, and federal Consolidation loans

Who Can't Use It:

• Parents with PLUS loans or other types of loans
• Students with private loans, state loans, or other loans not guaranteed by the federal government

How It Works:

• IBR works on a sliding scale based on income and family size (see chart)
• If you earn less than 150% of the poverty level (for your family size) your required loan payment is $0
• If you earn more than 150% of the poverty level (for your family size) your required loan payment is capped at 15% of whatever is earned above the previously stated amount