Southwestern Law School Los Angeles, CA

Income-Based Repayment (IBR)

About IBR | Partial Financial Hardship (PFH)
Additional Information | Applying for IBR

Important Changes to Federal Loans as of July 1, 2010
Several significant changes to federal student loans take effect on July 1 that will benefit new and current borrowers. Click here to see an explanation of all the federal student loan changes.

Starting July 1, 2009, Income-Based Repayment (IBR) - a new way to make federal student loan payments more manageable - became available. Recent graduates may qualify for this new type of public service loan forgiveness after 10 years of eligible payments and employment in the government or at a nonprofit 501(c)(3) organization.

About IBR

The IBR plan is a federal program designed to assist those who have high student debt levels relative to their income, making federal student loan payments more manageable by placing a cap on the payments so applicants who qualify can afford their monthly bill.

After demonstrating partial financial hardship, participants can remain in the program until they pay off the loan or decide to leave the program. After 25 years, borrowers who have not repaid their entire loan balance may be eligible for loan forgiveness, which means the federal government will discharge the remaining loan balance.

Income-based repayment gives customers an opportunity to make affordable payments on:

  • Stafford Loans
  • Grad PLUS Loans
  • Most federal consolidation loans

Loans that are not eligible for IBR:

  • Parent PLUS Loans
  • Federal consolidation loans that include Parent PLUS Loans
  • Private loans

Partial Financial Hardship (PFH)

Customers must demonstrate PFH (as defined by federal regulations) to enroll in the IBR plan. Understanding partial financial hardship is an important part of applying for IBR:

  • PFH is based upon the customer's income, state of residence, family size, and student loan indebtedness
  • Customers must establish PFH for each loan entering IBR
  • Each customer must annually recertify family size and adjusted gross income
  • Customers may remain in IBR even after they no longer qualify for PFH

Additional Information

While IBR can be helpful for those demonstrating partial financial hardship, it is not for everyone. Numerous resources can be found below. Questions may also be directed to the Financial Aid Office.

  • Several significant changes to federal student loans that will benefit new and current borrowers took effect on July 1, 2010. Click here to see an explanation of all the federal student loan changes.
  • Read about President Obama's plan to improve Income-Based Repayment here. For additional information, click on the links for IBR Info and Equal Justice Works below.
  • IBR Info is an independent, nonprofit source of information about new federal student loan repayment and forgiveness programs.
  • Equal Justice Works

    • Public Service Loan Forgiveness: Basic Checklist (PDF)
    • Eligible Loans (PDF)
    • Qualifying Public Service Employment (PDF)
    • Qualifying Payments (PDF)
  • Access Group

    • Income-Based Repayment and Federal Student Loan Forgiveness (PDF)
      *slides correspond to the Video below.
    • Video from January 27, 2011 Presentation on IBR by Tom Ramaeker.
    • Definition of Public Service
  • Federal Student Aid

    • Loan Forgiveness for Public Service Employees (PDF)
  • Helpful information to explain IBR and describe those who qualify for it is also available on Sallie Mae's website, including the following resources:

    • The IBR Eligibility and Monthly Payment Worksheet helps students and borrowers estimate their eligibility for the IBR program before they contact their lender to enroll in the program. The first side of the worksheet provides helpful information for completing the worksheet.
    • For customers who pursued a career in public service and struggle with a high debt-to-income ratio, the Loan Forgiveness for Public Service document gives a summary of the program's requirements and benefits.
  • Financial Tools from Access Group: The Pick-a-Plan Calculator
    Choosing a payment plan is an important first step in successful repayment planning. To help students evaluate and choose a payment plan that best suits their needs, Access Group has developed the Pick-a-Plan Calculator. This interactive tool:

    • Compares the estimated monthly payments for their federal Stafford, Grad PLUS, and Consolidation loans;
    • Shows a side by side comparison based on the Standard, Graduated, Extended, and Income-Based repayment plans; and
    • Is easy to use - enter the loan information one time and see estimates for four repayment plans with a click of a button.
  • The John R. Justice Loan Repayment Program
    A student financial aid program designed to promote careers in public interest law is now available to Washington lawyers through the Higher Education Coordinating Board (HECB). Click here for more information.

Applying for IBR

To apply for IBR, contact your lender directly. If you have direct loans from the U.S. Department of Education, click here. If you do not know who is servicing your loan, check the National Student Loan Data System database.

External sites are not endorsed by Southwestern and are provided for informational purposes only.