Income Based Repayment for student loan debt

I share an office space with Karen, one of MMI's budget and debt counselors.  Over lunch today, Karen was telling me that a lot of her clients have been asking about student loan repayment, specifically about Income Based Repayment (IBR). IBR was introduced in July 2009 and allows qualifying federal student loan debtors to base their monthly student loan payments on their income.  Here are some of the highlights of IBR:

In the future, look for changes to IBR that were outlined in the The Health Care and Education Reconciliation Act of 2010.  For example, the Act changes the loan forgiveness from 25 years to 20 years. However, it only applies to new borrowers of new loans taken out after July 1, 2014.

If you are struggling with student loan debt, but IBR is not the right option for you, there may be other solutions.  For information about consolidation, deferment, forbearance, and cancelation read Payback time: How to repay your student loans.

Kim McGrigg is the former Manager of Community and Media Relations for MMI.

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