Whether you’re a recent graduate or have been out of school for awhile, you might have concerns about repayment on student loans you borrowed from the federal government. For some, the job market may be more challenging than you expected; for others, you might be experiencing personal troubles or financial hardship. Regardless of your circumstances, you can bet that the federal government will expect regular payments under the terms of your student loan.

Fortunately, there are options for borrowers going through tough times. The income based repayment plan (IBR) sets your monthly payment amounts according to what you can afford, taking into account your income and household needs. Here’s some general information on the IBR program.

Income Based Repayment Plan For Federal Student Loan

Am I eligible to apply for an IBR plan? There are certain eligibility requirements to qualify for the program. Specifically, the payment you would be required to make must be less than what you would pay under a 10-year repayment period – taking into account your income and family size; if it’s more, you would receive no benefit from applying for the IBR plan and you’d be disqualified. You can meet this qualification if your student loan debt is higher than your discretionary income or is a large percentage of your annual income.

How are monthly payments determined under an income based repayment plan? There are a few factors that impact your monthly payment amount for an IBR program.

  • New v. Non-New Borrower: You’re a “new” borrower if you had no outstanding balance on a Federal Direct Loan when you received an additional Direct Loan on or after July 1, 2014.
    • New borrowers will generally be required to pay 10% of discretionary income, though this amount will never exceed the 10-year repayment period amount.
    • Non-now borrowers will be required to pay 15% of discretionary income. Again, you’ll never be obligated to pay more than the repayment amount


  • Repayment Periods: You’ll be required to pay the designated monthly amount for 20 years if you are a new borrower or 25 years if you are not a new borrower under the IBR definition. At the end of the repayment period, your federal student loan balance is forgiven – even if the amount is not fully paid off.

How do I apply? To start the application process, you should submit an Income-Driven Repayment Plan Request, either online via printable form. You can select the IBR plan or ask that your loan servicer determine other appropriate plans; you’ll typically be set up with an income-driven plan that includes the lowest monthly payment amount. The application requires you to provide income information that will determine your eligibility for an IBR plan and your monthly payment amount.

Federal Student Loan Attorney in San Diego

You can see how the application process can be complicated, so it’s smart to consult with a federal student loan attorney in San Diego. These professionals can help you determine your options and figure out whether you’re eligible for an income based repayment plan. They can also answer any other questions on program details.

Daniel R. Gamez, an attorney focusing exclusively in debt settlement, is licensed to practice in all state and federal courts in California and Texas. Mr. Gamez owns and operates the Gamez Law Firm in La Jolla, CA. For more information, please contact Daniel Gamez at 858-217-5051, daniel@gamezlawfirm.com or visit gamezlawfirm.com.