Income based repayment ibr is a repayment plan available to federal student loan borrowers. The ibr plan caps monthly payments at 15 of discretionary income for borrowers who took out their first loan before july 1 2014 or 10 for those who were new.
This is usually the case in couples where only one spouse has federal student loans.
Income based repayment chart. It s based on the idea that how much you pay each month should be based on your ability to pay not how much you owe. The income based repayment ibr plan is the second most popular idr plan following revised pay as you earn repaye. When applying for ibr the government looks at your income family size and state of residence to calculate your monthly payments.
There is no minimum monthly payment. Income based repayment caps monthly payments at 15 of your monthly discretionary income where discretionary income is the difference between adjusted gross income agi and 150 of the federal poverty line that corresponds to your family size and the state in which you reside. The single borrower remains eligible for the program for any salary up to 55 000.
Fortunately there are several income driven repayment plans available that limit required monthly payments based on borrowers income helping them avoid default. Much of the discussion on spousal income revolves around avoiding your spouses income to lower student loan payments. As of 2020 2 75 million borrowers are enrolled in ibr with 172 6 billion.
The income based repayment plan also known as ibr is one of the most common programs available for borrowers with federal student loan debt. Income based repayment ibr is available to federal student loan borrowers and helps make your monthly student loan payments more manageable. When applying for ibr the government looks at your income family size and state of residence to calculate your monthly payments.
The chart demonstrates that a single borrower on the income based repayment plan must earn at least 20 000 a year before they are required to make a loan repayment. Today we are going to focus on income driven repayment plans for spouses who both have federal student loans.