INCOME-BASED REPAYMENT (IBR)

WHAT IS IBR?

IBR is a new repayment plan for federal student loans which became available on July 1, 2009. IBR is only available for loans in repayment.

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LOAN TYPES ELIGIBLE FOR IBR

IIBR is available for these loan types:

• Stafford
• SLS
• Graduate/Professional PLUS
• Consolidation loans (except if they have an underlying Parent PLUS loan)

IBR is not available for these loan types:

• Parent PLUS loans
• Consolidation loans that paid off a Parent PLUS loan
• Private Education Loans
• Defaulted Federal Student Loans

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HELPFUL TERMS

When considering IBR, it will be helpful to understand some basic terms and concepts.  The payment types in red are actual IBR payment types; the others are for calculation purposes or are payments you’d make if you exit IBR.  Read on! 

Standard-Standard Payment

Although the IBR regulations refer to this as a payment type, it is not what you would pay while you’re in IBR.  It’s only used for comparison purposes when calculating whether or not you are eligible for IBR.  Think of this as an IBR yardstick. 

IBR is calculated by using the total balance of your loan(s) when you first entered repayment and a 10-year repayment period. 

Partial Financial Hardship (PFH) Payment

This is the payment that you could qualify for under IBR.  If the annual amount due on all your eligible loans (calculated as the Standard-Standard Payment multiplied by 12) exceeds 15% of the difference between your AGI and 150% of the Poverty Guideline for your residence and family size, you are considered to have a Partial Financial Hardship.  If you qualify, this payment type could reduce your monthly payment for up to 12 months at a time.  This payment type is the first payment level in IBR.  

Permanent Standard Payment

This is the second payment level in IBR and is the payment you would make if you no longer qualify for the PFH payment. This payment amount will be higher than the PFH payment because you no longer have a Partial Financial Hardship.  Your payment amount will never increase past the Permanent-Standard amount as long as you remain in IBR and you may re-enter PFH if you once again qualify for those payments.

Expedited-Standard Payment

This is the payment you would make if you decide to leave the IBR program, so this is not actually “in” IBR.  When you are no longer in IBR, your loans must pay off in their original repayment term, including any time spent in IBR.  Because of this:

• the Expedited-Standard Payment for loans with a shorter repayment term (e.g., lower-balanced Stafford loans) may be much higher than the Permanent-Standard Payment.
• the Expedited-Standard Payment for loans with a longer repayment term (e.g., higher-balanced Consolidation loans) may be much lower than the Permanent-Standard Payment. 

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FORMULA

This is the formula used to determine whether you are eligible for the Partial Financial Hardship category of IBR:

If the amount in line 4 is less than the amount in line 5, then you qualify for IBR with the Partial Financial Hardship payment.

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CALCULATOR

You can find a calculator to help you determine whether you qualify for IBR at http://www.mappingyourfuture.org/paying/ibrcalculator.cfm. 

A UHEAA Customer Service agent can also help you determine whether you qualify. You will need to provide an estimate of your Adjusted Gross Income for the previous tax year.  Please call us for details. 

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LOAN FORGIVENESS

Any remaining balance on a loan that has been in IBR may be forgiven after 25 years and 300 qualifying payments.

Payments that qualify toward forgiveness are:

• PFH Payments,
• Permanent-Standard payments,
• any payment made outside of IBR on or after July 1, 2009 (provided these payments are equal to or greater than the Standard-Standard payment or made on a level repayment plan with a 10-year payoff term), and
• a payment is counted for every month of Economic Hardship Deferment used after July 1, 2009.

No forgiveness will be granted before July 1, 2034.  Forgiven amounts may be taxable.

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CUSTOMER SERVICE HOURS

If you have questions, please contact us at (801) 321-7294 or toll free at (877) 336-7378.  Customer Service agents are available Monday through Thursday 8 a.m. to 8 p.m., and Friday 8 a.m. to 5 p.m. MT.

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