Income-Based Repayment

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This program helps make educational loan payments more affordable for high debt/low income borrowers, including AmeriCorps members and VISTAs living on a stipend. Participation in the program can make a borrower's monthly payments as low as $0-5 per month based on income.

Here are the key items to know while you serve:

  • Apply through your lender. If you can't find links on your lender's website, give them a call!
  • Even if the payments are $0-5, each month counts toward the 120 months needed to take advantage of the Public Service Loan Forgiveness program.
  • Income-based repayment does not require that you are in public service, only that your income is low.
  • Your payments will be recalculated annually.
  • Income-based repayment works with virtually all federally-backed student loans.
  • You do not have to have Direct Loans to qualify, just any lender that offers IBR. (Search for "Income Based Repayment" on your lender's site to learn more).
  • In many cases, it is better for married people to file separate tax returns when enrolling in the IBR program. This also depends on the laws in your state. See a tax consultant to find what makes best sense for you.
  • Participation is not a good idea if you will earn a high income in the next few years and/or not have 10 years employed in the public service sector. The low payments you'll make early in the program will cause you to pay more in interest down the road.
  • The program started in July 2009.
  • If you are enrolled in the program (and continually qualify) for 25 years, your loan balance will be forgiven, no matter what the amount. (Any forgiven amount is subject to taxes in the year it is forgiven.)

Crunch the numbers to see how much you might (or might not) save over the life of your student loans if you participate in the Income-Based Repayment and Public Service Loan Forgiveness programs.

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