Income-Based Repayment: Are you eligible?
Income-Based Repayment can substantially reduce the amount you must pay each month on your federal student loans. You qualify for IBR if you have a "Partial Financial Hardship" with regard to your eligible federal student loans.
Printer-friendly versionDo I have a Partial Financial Hardship?
A Partial Financial Hardship exists when the annual amount due on all of a borrower’s eligible loans exceeds 15 percent of "discretionary income." Typically, if you earn less than you owe in eligible federal student loans, you may choose IBR. For many borrowers in IBR, your monthly payment amount will be less than 10 percent of your income.
Your discretionary income is calculated using your adjusted gross income from your latest income tax filings and also considers your family size.
Public service employees with a relatively high student debt-to-income ratio will generally qualify and demonstrate a Partial Financial Hardship. For example, a single person with an adjusted gross income of $48,000 who owes about $35,000 in federal student loans will be able to choose Income-Based Repayment.
Estimates* of who may be eligible for IBR based on a partial financial hardship:
AGI | Debt |
$25,451 | $10,000 |
$30,055 | $15,000 |
$34,658 | $20,000 |
$39,261 | $25,000 |
$43,864 | $30,000 |
$48,467 | $35,000 |
$53,071 | $40,000 |
$57,674 | $45,000 |
$62,277 | $50,000 |
$66,880 | $55,000 |
$71,484 | $60,000 |
$76,087 | $65,000 |
$80,690 | $70,000 |
$85,293 | $75,000 |
$89,896 | $80,000 |
$94,500 | $85,000 |
$99,103 | $90,000 |
$103,706 | $95,000 |
$108,309 | $100,000 |
$112,912 | $105,000 |
$117,516 | $110,000 |
$122,119 | $115,000 |
$126,722 | $120,000 |
$131,325 | $125,000 |
Source: Jeff Hanson, Ph.D., Director of Borrower Education, Access Group, Inc.
Assumptions: Interest rate = 6.8%; 2009 Poverty Guidelines; Household size of 1 residing in 48 contiguous states
* These are only estimates. Your lender or servicer will confirm your eligibility for IBR and calculate your monthly payment amounts based on your individual circumstances.