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. Plug in some numbers and see how much you can save under IBR.
What Is An Income-Based Repayment (IBR) Calculator?
An income-based repayment calculator is a tool that helps borrowers estimate their monthly student loan payments based on their income and other relevant factors. It is commonly used in the context of federal student loans, where income-driven repayment plans are available.
Income-driven repayment plans are designed to make loan repayment more manageable for borrowers who have a high loan balance compared to their income. These plans set monthly payment amounts based on a percentage of the borrower’s discretionary income, which is typically defined as the difference between their adjusted gross income and a specific poverty guideline for their family size and state of residence.
Who Is Eligible For Income-Based Repayment (IBR)?
Eligibility for income-based repayment (IBR) plans varies depending on the specific plan and the type of loans. However, in general, the following criteria are common for most income-driven repayment plans for federal student loans:
– Loan Type: Income-driven repayment plans are typically available for federal student loans, including Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans (made to graduate or professional students), and Direct Consolidation Loans.
– Demonstrated Financial Need
– Partial Financial Hardship
– Repayment Plan Selection
Can I Enroll In Income-Based Repayment (IBR) If I Have Parent PLUS Loans?
Parent PLUS Loans and loans from private lenders are generally not eligible for income-driven plans.
What Considerations Does The Income-Based Repayment (IBR) Calculator Make?
The calculator takes into account various factors such as the borrower’s income, family size, state of residence, and loan details (e.g., loan balance, interest rate) to estimate the monthly payment under different income-driven repayment plans. It helps borrowers understand how their payment amounts can change based on different income levels and repayment plan options.