Are your student loan payments relatively high compared to your income?

The income-based repayment (IBR) program enables eligible federal student loan customers experiencing financial difficulty to cap their monthly bill at 15% of their discretionary income.

After demonstrating partial financial hardship, participants can remain in the IBR program until they pay off the loan or decide to leave IBR. After 25 years, borrowers who have not repaid their entire loan balance may be eligible for loan forgiveness, which means the federal government will discharge the remaining loan balance.

While IBR can be helpful for those demonstrating partial financial hardship, it is not for everyone. Sallie Mae has created several resources, including a repayment calculator to explain IBR, help you assess whether you might be eligible, compare your monthly payment options under IBR and other repayment plans, and assist you in making an informed decision.

Income-based repayment helps eligible customers manage their payments on:

• Stafford loans
• Grad PLUS loans
• Most federal consolidation loans

Loans that are not eligible for IBR:

• Parent PLUS loans
• Federal consolidation loans that include Parent PLUS loans
• Private loans

This federal program is designed to assist those who have relatively high federal student loan payments as compared to their incomes. Customers must demonstrate partial financial hardship (PFH) (as defined by federal regulations) to enroll in the IBR plan. Understanding partial financial hardship is an important part of applying for IBR:

• PFH is based on a formula set by the federal government that considers the customer’s income, state of residence, household size, and balance of eligible federal loans at the start of repayment.
• Customers must establish PFH for all of their loans entering IBR.
• Each customer must annually recertify family size and adjusted gross income.
• Customers may remain in IBR even after they no longer qualify for PFH.

How to apply for IBR

Sallie Mae customers simply need to complete, sign, and mail two forms: the IBR request form and IRS Form 4506-T, which gives the federal government permission to release income information to your lender or servicer. The quickest way to get the forms is to download them from your online account. Make sure to list all of your eligible federal loans with other lenders on the IBR request form and mail both forms to the Sallie Mae address provided on the bottom of the IBR request form.

Please note that the IBR application process may take several weeks to complete. In the meantime, if you anticipate difficulty in making any scheduled payments please call us at 888-2-SALLIE (888-272-5543) for assistance.

If you have loans with other loan holders or servicers, you will need to apply for IBR with each holder and/or servicer.

An easy way to make sure you've listed all of your eligible federal loans on your IBR request form is to view your loan information on file with the National Student Loan Data System at www.nslds.ed.gov. You'll need your FAFSA pin to log in; if you don't remember it, you can request a duplicate pin at www.pin.ed.gov.