Starting in July, borrowers can choose a new repayment plan — Income-Based Repayment, or IBR — that calculates payments on federal student loans by income and family size. Under this program, qualified borrowers will never have to spend more than 15% of their discretionary income on student loan payments.
Sometimes that first job (or two) out of college might not produce a paycheck that can cover the standard monthly payment, or, in today’s job market, you might not even find a job right after graduation. This new repayment plan may solve your student loan payment dilemma.
The plan does have downsides: more interest will accrue, and it will take you longer to pay off your loan. And of course, you must meet certain requirements in order to follow an IBR plan.
For more information, contact your lender or visit www.ibrinfo.org.