Monthly Payments: Your payment is calculated by taking 15% (10% if you are a new borrower*) of the difference between your adjusted gross income (AGI) and 150% of the poverty level for your state and family size. If your calculated monthly payment is less than what your payment would be on a standard repayment plan, you qualify for IBR. Your payments change as your income changes.
On subsidized loans, if your payment does not cover all interest that accrues, you do not have to pay the difference between your monthly payment amount and the remaining interest that accrues for the first 3 consecutive years of repayment under the plan.Requirement to Recertify Income and Family Size: You are required to recertify your income and family size annually. Failure to submit documentation by the deadline will result in capitalization of interest and an increase in payment amount to the 10-year standard payment amount.
If you want to leave the plan, you will be placed on the standard repayment plan. You may not change to a different repayment plan until you have made at least one payment under the standard repayment plan or a payment under reduced-payment forbearance.
To re-enter the plan, you must again demonstrate a partial financial hardship.Quick Comparison: You must have a partial financial hardship. Your monthly payments will be lower than payments under the 10-year standard plan. You'll pay more for your loan over time than you would under the 10-year standard plan. If you have not repaid your loan in full after making the equivalent of 25 years (20 years if you are a new borrower*) of qualifying monthly payments, any outstanding balance on your loan will be forgiven. You may have to pay income tax on any amount that is forgiven.
*You are a new borrower for the IBR plan if you have no outstanding balance on a Direct Loan or Federal Family Education Loan (FFEL) Program loan as of July 1, 2014 or have no outstanding balance on a Direct Loan or FFEL Program loan when you obtain a new loan on or after July 1, 2014.