An income-sensitive payment plan is based on 4% of your annual adjusted gross income or the monthly interest which accrues on your loan, whichever is greater. To apply for this payment plan, you must submit an application form along with a copy of your most recent Federal tax return, last month's pay stubs or a letter from your employer stating your current position and monthly income. If yoy are self-employed, you may submit a signed statement of your most recent annual earnings. Spousal consolidation loans require documentation of your spouse's income as well. If approved, this payment plan will be in effect for 12 months. A new application must be completed every year. Please note that there is a five-year maximum for this payment plan. Your loan term may be extended for up to five years to match the repayment plan terms and you may pay more interest over the life of the loan.

Download income-sensitive application

You can choose this option if none of your student loans were made before October 7, 1998, and if you owe more than $30,000 in federal student loans. You can extend your repayment up to 25 years, but this will increase the amount of interest you pay. This is an alternative to consolidation, which can lower your monthly payments.

Download extended repayment form

Income-Based Repayment (IBR) takes into consideration your income, family size and federal education loan debt.

Eligible Loans

• Stafford
• SLS
• Grad PLUS
• Federal Consolidation Loans including the above and/or Perkins, HPSL, HEAL and FISL loans
• Spousal Consolidation Loans if the above loan types are included

Ineligible Loans

• Parent PLUS
• Consolidation Loans including Parent PLUS loans
• Private student loans, state loans or other loans not guaranteed by the federal government

How does the IBR plan work?

You must provide the following to determine your eligibility:

• Application form. Family size, federal student loan debt and original signatures must be included. Faxes and forms without an original signature will not be processed.
• A copy of your most recent tax return (Form 1040, 1040A or 1040 EZ. Must contain a "wet" signature, and if filed with a spouse, signatures are needed from both parties). Faxes and forms without an original signature will not be processed.
  • If your most recent tax return does not reflect your current financial situation, you may complete the Alternative Documentation of Income form, located on page 4 of the application.
• You must submit all of this information to each lender or servicer to have all of your student loans placed in IBR.

Payment Levels

Partial Financial Hardship - A Partial Financial Hardship (PFH) payment is calculated from your income and family size and used to determine eligibility for the IBR plan. A PFH occurs when the annual amount due and all eligible federal student loans (even those with other companies), as calculated under a standard 10-year repayment plan, exceeds 15% of the difference between your Adjusted Gross Income and 150% of the poverty line for your family size.

Permanent-Standard - The payment amount calculated on the existing loan balance when you entered IBR and is based on a 10-year term. You would move to this payment amount after you no longer qualify for a PFH but wish to remain in the IBR plan.

Expedited-Standard - The payment amount once you voluntarily elect to leave the IBR plan. It is calculated using the remaining loan term and is based on a standard repayment plan, determined by your loan type (maximum 10 years for Stafford and Grad PLUS; maximum 30 years for Consolidation Loans, based on original balance).

How payments are applied:

1. Interest
2. Collection costs
3. Late charges
4. Principal

Recertification

You must recertify every 12 months.

Loan Forgiveness

If your loan is not paid off in 25 years (300 payments), the balance may be forgiven. Please contact your financial advisor for tax implications of loan forgiveness.

Estimate your eligibility with an online calculator here.

Download the application form here.