IBR is a new student loan repayment program started in July of 2009. Unfortunately, students may take out too many student loans in college. But there are no repayment requirements until after graduation. This can result in major debt. After graduation, a student may find that the monthly payments are more than their new salary.
This is problematic because it keeps people below the poverty level. It can result in children going without. In addition it can sabotage relationships and marriages. People in this kind of debt may never have the resources pooled to rise above it.
To deal with this issue, the federal government developed IBR. The abbreviation IBR means income based repayment. The program sets your payments using factors like income and the size of your family. The system will help borrowers remain above water and care for their families.
IBR can help a lot of people handle their student loan debt. It has initiated viable repayment options. There are some other very attractive aspects to IBR. For example, you have the option of remaining in IBR for 25 years. You may be able to have your debt cancelled at the end of this term.
Not surprisingly there is some paperwork involved in IBR. You also have to reevaluate your income each year. Of course your family size might also change. But your payments will never exceed 15 percent of the amount over the poverty level you earn. You could be below the poverty level for family size at some point. Should this occur then you would pay nothing. This enables you to keep a handle on your debt in any situation.
A lot of people are interested in getting involved in IBR. They have concerns that they cannot participate because they are in other programs. However lots of programs will actually send IBR your credit with them. It is not likely that you would lose ground by switching over. Also, participating in IBR does not rule out student loan forgiveness. Participating in IBR does not make you ineligible for forgiveness based on public service.