Income-Based Repayment (IBR)

This is one of the income-driven repayment plans available to federal student loan borrowers. The plan allows for a reduced monthly payment on most federal student loans – making it a viable option for some borrowers to successfully manage, and afford, their student loan debt.

How Does IBR Work?

Income-Based Repayment* “caps” loan payments at 15% of your discretionary income, and the monthly payment is adjusted annually. Verification of your income and family size is required each year. The repayment term for IBR is up to 25 years. After 25 years, any remaining debt will be forgiven; however, the forgiven amount is taxable.

Who Qualifies for IBR?

To qualify for the plan, borrowers need to have a partial financial hardship (PFH). Most medical residents exhibit this hardship. Loan servicer(s) are the point of contact to determine your eligibility. Additional qualifying information is available on the Federal Student Aid website.

Which Loans Qualify for IBR?

  • Stafford Loans (Direct or FFELP)
  • PLUS Loans (not to parents)
  • Consolidation Loans (Direct or FFELP)
  • Perkins and LDS Loans (only if part of a Consolidation Loan)

What are the Benefits of IBR?

  • Payments are tied to household income and family size.
  • The maximum payment is capped at an amount equal to the Standard 10-year repayment plan, which is determined when entering IBR.
  • A postponement of interest capitalization occurs until a PFH no longer exists. Capitalization could be postpones until residency is over.
  • A partial interest subsidy is available for the first three years. There is no limit to how much interest can capitalize.
  • The IBR repayment plan is a qualifying plan for Public Service Loan Forgiveness (PSLF)

What is the Payment Amount?

To help determine your monthly payment under IBR, use the MedLoans® Organizer and Calculator.

How to Apply?

Submit the Income-Driven Repayment Plan Request form online at StudentLoans.gov, or contact your servicer.

*If you are a new borrower on or after July 1, 2014, then your payment will be based on 10% of your discretionary income and your repayment term will be 20 years.

Example of a PGY-1 Resident in IBR

 

Monthly Adjusted Gross Income(1) $4,640
(minus) 150% of Poverty Line(2) - $1,530
Discretionary income = $3,110
(multiplied by)(3) x .15%
Monthly IBR Payment $470(4)

 

(1) Based on AAMC estimate of 2018 first post-M.D. year median stipend
(2) Based on AAMC estimate of 2018 federal poverty guideline for a family size of one in the 48 contiguous states
(3) Based on 2015 federal regulations 
(4) New borrowers on or after July 7, 2014, qualify for the “new” IBR plan, but the PAYE plan may lead to lower total repayment cost.   

What Other Income-Driven Repayment Plans Exist?

Income-Contingent Repayment (ICR)
Pay As You Earn (PAYE)
Revised Pay As You Earn (REPAYE)

IBR is the only income-driven repayment plan that is available to borrowers with both FFEL and Direct Loans.

    

Financial Information, Resources, Services, and Tools (FIRST)

MedLoans® Organizer and Calculator (MLOC)

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The MedLoans® Organizer and Calculator was developed to assist medical students and residents with managing their education debt.

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