Partial Financial Hardship
Printer-friendly versionA Partial Financial Hardship exists when the annual amount due on all of a borrower’s eligible loans, as calculated under a standard 10-year repayment plan, exceeds 15 percent of “discretionary income.”
Public service employees with a relatively high student debt-to-income ratio will readily qualify. A recent law graduate with typical student debt practicing as a civil legal aid attorney will easily demonstrate a Partial Financial Hardship. For example, a single person with an adjusted gross income of $48,000 will be able to choose Income-Based Repayment if he or she owes about $35,000 in federal student loans.
Approximate Maximum Adjusted Gross Income (AIG) Needed to
Qualify for Income-Based Repayment at Specified Debt*
Assumptions: Interest rate = 6.8%; 2009 Poverty Guidelines;
Household size of 1 residing in 48 contiguous states.
| AGI | Debt |
| $20,848 | $5,000 |
| $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 |
| $135,929 | $130,000 |
| $140,532 | $135,000 |
| $145,135 | $140,000 |
| $149,738 | $145,000 |
| $154,341 | $150,000 |
| $158,945 | $155,000 |
| $163,548 | $160,000 |
| $168,151 | $165,000 |
| $172,754 | $170,000 |
| $177,357 | $175,000 |
| $135,929 | $130,000 |
| $140,532 | $135,000 |
| $145,135 | $140,000 |
| $149,738 | $145,000 |
| $154,341 | $150,000 |
| $158,945 | $155,000 |
| $163,548 | $160,000 |
| $168,151 | $165,000 |
| $172,754 | $170,000 |
| $177,357 | $175,000 |
*Source: Jeff Hanson, Ph.D. , Director of Borrower Education, Access Group, Inc.