The federal government offers an Income Based Repayment (IBR) option for people who qualify. This plan will use your monthly income and family size to determine how much your payment will be. If you qualify for twenty-five years and make on time payments the entire time you can have the remainder of the loan forgiven. If you work in the public sector the amount of time is reduced to ten years.
To apply for an income based payment you will need to contact your lender and ask to be considered for the IBR program. The lender will need to collect information to verify your family size and your current income. If you are approved you will need to reapply each year to continue to qualify under the program’s guidelines.
The loan forgiveness benefits only count for the years that you are enrolled in the IBR program, and previous years paying on the loans will not count, so it is important to apply if you believe you may qualify for the loan.
If your adjusted payment does not cover the amount of interest than the government will pay the difference in interest on the subsidized Stafford loans. You may qualify for this program for all Stafford, Grad PLUS and federal consolidation loans. This program does not work for student loans from private lenders.
