Income Driven Repayment Plan And Loan Forgiveness

Ibr is an income driven repayment plan that came into effect in july 2009.

Income driven repayment plan and loan forgiveness. Originally part of the college cost reduction and access act. The income based repayment ibr plan offers you a way to reduce monthly student loan payments to 15 percent of your discretionary income with the potential for total student loan forgiveness if you qualify. However if public service is your desire and you meet all the criteria for eligibility you could benefit by combining pslf with an income driven plan and experience loan forgiveness in a shorter period. With the paye and ibr plans your monthly payment amount is capped so that your payment is never more than it would be with a 10 year standard repayment plan based on the amount you owed at the time you entered the income driven repayment plan.

Department of education will pay the interest on your loan up to three consecutive years. Other loan forgiveness options available with the income driven plans take 20 or 25 years to realize. Another benefit of income based repayment is interest forgiveness.