Student Loan Forgiveness through Income-Based Repayment (IBR)

Having been someone who has been in the thick of the student loan repayment maze, I would like to take this opportunity to discuss with you the student loan forgiveness through Income-Based Repayment (IBR). This program is a possible way out of financial burdens for numerous borrowers.

What is Income-Based Repayment (IBR)?

IBR is the federal student loan repayment plan, where the monthly payment is set according to your income and family size. The plan is to assist borrowers with high debt compared to their income even if it takes a longer period through available alternatives.

How IBR Works

Under IBR, your monthly payment is generally equivalent to 10% to 15% of your discretionary income. Once you either repay your loans in their entirety while meeting the requirements or 25 years have elapsed (if you took the loan after a certain date), what's left may be discharged.

Eligibility for IBR Forgiveness

The following criteria should be fulfilled to receive forgiveness through IBR:

Own qualified federal student loans

Pay the required period's payments regularly and on time

Revival of income and family status should be done annually

Benefits of IBR

Most important of the IBR advantages are:

Less monthly payments based on your income

Possibility of the credits' cancellation after 20 or 25 years

Protection from default, in case your earnings diminish

Considerations

It should be noted that the pardoned sums of money may be taxable depending on the recipient's financial situation. Furthermore, your loan balance might see a rise in case your payments are not large enough to cover the interest accrued.

I strongly advocate every borrower to re-think over their choices and get advice from a financial expert or their loan servicer on the subject if IBR is your only choice.