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Financial Aid >Post Grad >CCRAA >IBR

- Income-Based Repayment (IBR) -

Beginning July 1, 2009, the CCRAA extends to borrowers of Federal Loans (FFELP and Direct Loans) the opportunity for a repayment plan that is determined by the borrower's AGI (adjusted gross income). For some of our Law students this may offer a lower monthly payment plan than that of the standard 10 year or even extended 25 year repayment plans. Below is a brief overview of the Income-Based Repayment (IBR) plan.

Eligibility Criteria:

(1) IBR is only available for repayment of "Qualifying Federal Loans". This only includes Stafford, Grad PLUS, and Federal Consolidation Loans (FCL) of FFELP and Direct Lending. Parent PLUS Loans or any Federal Consolidation Loans which included a Parent PLUS Loan are not eligible.

(2) The Borrower must be experiencing "Partial Financial Hardship". This is true when the annual amount due on your total eligible federal student loan debt in repayment at the standard 10 year repayment plan exceeds 15% of your household AGI above 150% of the poverty line for your family size. An easy-to-use calculator is available at www.finaid.org/calculators or use the IBR Worksheet to help you determine if you are experiencing "Partial Financial Hardship". Note: Household AIG is Borrower income and Spousal income if taxes are filed jointly.

(3) The Borrower must undergo an "Annual Review" and submit documentation to the loan holder/servicer annually to re-evaluate eligibility and re-calculate minimum monthly payments.

Here is an example of how Income Based Repayments and Loan Forgiveness will work (beginning July 1, 2009). These figures are "ball park" and are intended more for demonstrative purposes rather than calculate precise monthly payments.

Assuming Total Federal Loan Debt is $150,000
and the Adjusted Gross Income is $60,000.

Minimum Monthly Payments

Remaining Balance at the End of each Year

Year

Income-Based

10 Year Standard

25 Year Extended

Income-Based

10 Year Standard

25 Year Extended

1

$555

$1,700

$650

$153,000

$140,000

$148,000

2

$580

$1,700

$650

$156,000

$130,000

$145,000

3

$600

$1,700

$650

$159,000

$118,000

$143,000

4

$630

$1,700

$650

$161,000

$105,000

$140,000

5

$660

$1,700

$650

$163,000

$90,000

$137,000

6

$690

$1,700

$650

$165,000

$80,000

$134,000

7

$720

$1,700

$650

$167,000

$72,000

$131,000

8

$750

$1,700

$650

$168,000

$57,000

$127,000

9

$780

$1,700

$650

$169,000

$40,000

$124,000

10

$810

$1,700

$650

$170,000

$20,000

$119,000

11-25

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