What do I need to be qualified for a new Income Based Repayment Plan for my student loan?
Some students struggling with federal loans could soon lower their monthly payments or eliminate them altogether. Under the Income-Based Repayment plan, available starting today, college graduates can cut their monthly payments down to a rate tailored to their income and family size. The initiative was started by the Project on Student Debt, a nonprofit organization funded by the national Institute for College Access & Success. The biggest difference in this new initiative is that it’s available to more students than its predecessor, officials said. “The [original program] protects less income and takes a higher percent of what’s left,” said Edie Irons, the communications director for the national Project on Student Debt. The new payment plan is similar to the existing Income-Contingent Repayment program at the UI, the only plan of its kind until now. Both plans allow students to make their monthly loan payments based on their income. “Those who participated in the indirect loans alrea
According to the new program, students pay 15 percent of the portion of their income that is above the federal poverty line, Irons said. Some don’t have to pay at all. Graduates whose income is less than 150 percent of the federal poverty level are exempt. The original initiative only applies to students who receive loans through the Federal Direct Student Loan Program, which is offered by the UI. For example, the new plan doesn’t apply to those with state, private, or the Federal Direct PLUS (Parent) Loan, which are given to parents who plan to pay for their child’s higher education. Sources: http://www.dailyiowan.com/2009/07/01/Metro/11898.
IBR caps monthly payments at 15 percent of earnings above 150 percent of the poverty line, or $10,830 for a single-person household. Online calculators can help you compare what your income-based payments, income-contingent payments, and income-sensitive payments would be. …. Borrowers who think they could benefit from IBR should contact their lender and ask for an application that will authorize the release of their adjusted gross income from the Internal Revenue Service each year. Sources: http://www.reuters.
