Income Driven Repayment Plan Loan Forgiveness

While highly popular as a student loan repayment and forgiveness plan ibr was.

Income driven repayment plan loan forgiveness. Originally part of the college cost reduction and access act the ibr plan was signed into law by president george w. 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. If you make your payments in full and on time and the loan is still not completely paid off after this period of time any remaining loan amount will be forgiven and legally discharged. An ibr plan offers complete loan forgiveness after 20 years for borrowers who took their loans out after july 1st 2014 or 25 years if the loans were taken before that date.

When you reach the maximum number of payments under a respective idr any remaining unpaid interest or principal amount is forgiven. Once you are enrolled in an income driven repayment plan and given a monthly. Ibr is an income driven repayment plan that came into effect in july 2009. 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.

Income based repayment ibr which requires payments of 15 of discretionary income for 25 years with a cap on the payments.