Home  
Login  
INCOME-BASED REPAYMENT
 

Income-Based Repayment (IBR) is a payment plan available to borrowers with federal student loans (both Direct and FFEL) who have high debt relative to their income. It was designed to make student loan payments more manageable during hard financial times. Borrowers must provide proof of partial financial hardship to be considered for IBR. Annual recertification is also required.


Q: What types of student loans are eligible for IBR?

  • Subsidized and Unsubsidized Federal Stafford loans
  • Federal Graduate PLUS loan
  • Supplemental Loan for Undergraduate Students
  • Federal Consolidation loans that do not include Parent PLUS loans
Loans that are not eligible are: Parent PLUS loans, Consolidation loans that included a Parent PLUS loan, defaulted loans and private or alternative education loans.

Q: How low would my payments be on the IBR plan?

IBR uses a sliding scale to determine how much you can afford to pay on your federal loans. If you earn below 150 percent of the poverty line income for your family size (see below), your payment will be $0.

If you qualify for IBR, but earn more than 150 percent of the poverty line income, your loan payment will be capped at 15 percent of whatever you earn above that amount.

To determine if you may be eligible, visit an IBR Calculator - Student Aid on the Web


150% of Poverty Line Incomes (P.L.I.) for 2014

Family Size

The 48 States and D.C

Alaska

Hawaii

1

$17,505

$21,870

$20,130

2

$23,595

$29,490

$27,135

3

$29,685

$37,110

$34,140

4

$35,775

$44,730

$41,145

For each additional person, add:

$6,090

$7,620

$7,005


The chart below highlights some examples where IBR helped student loan borrowers in different situations lower their monthly payments. All examples provided are for illustrative purposes only and do not reflect the details of your account.

ExampleAdjusted Gross Income (AGI)Student Loan Debt Family Size *Standard (Level) PaymentIBR Payment
John$16,000$20,0001$230.16$0
Jane$25,000$20,0001$230.16$93.68
Sally and Bob$50,000$40,0002$460.32$330.06
Frank and Beth$80,000$75,0004$863.10$552.81
* Assumes a level payment plan on a 6.8% loan with a 10-year term.

Q: Are there any disadvantages to IBR?

  • You will likely pay more interest over the life of the loan
  • You will need to submit documentation each year
  • If you choose to change from IBR to another repayment plan, interest will be capitalized (added to principal)
  • If you choose to change from IBR to another repayment plan, you will be required to make one monthly payment under a standard plan before you may request a new repayment plan
  • If you remain in IBR so long that your total number of months in repayment exceeds the maximum repayment term otherwise applicable to your loans, you will not be able to select any other plan
  • Under current law, any loan amounts forgiven after 25 years will be considered taxable income
Q: Are you married?


If so, and you and your spouse file your taxes jointly, your combined income will be considered when we determine the resources you have available to make payments on your federal student loan(s). This is true whether or not your spouse also has IBR-eligible loans or is making payments on those loans.

If you are married, do not file a joint federal tax return with your spouse, and live in the community property states of Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin, you will need to send Alternative Documentation of Income specified in Section 5 with your Request.

Information for Married Couples:


Q: I file a joint federal tax return with my spouse and her/his loans are not serviced at ACS.


Ask your spouse to grant ACS (Organization Code 700006) access to his/her loan information on NSLDS before you return the request to us. We can access your spouse’s student loan information for 60 days.


Q: What income will you use to calculate my eligibility for IBR?

It depends on if you file a joint federal tax return with your spouse or file a separate return.
  • If you file a joint federal tax return with your spouse, we will use your total household income (your spouse’s and your own income).
  • If you do not file a joint federal tax return with your spouse, we will use your income.
  • If you live in a community property state and do not file a joint federal tax return with your spouse, we will use your income you provide on the Alternative Documentation of Income as explained in Section 5 of the Request.
Q: How do I apply for IBR?

  1. Click here to download the IBR application and cover letter.
  2. Read all the instructions before you begin. Federal Family Education Loan Program loans are only eligible for the IBR plan.
  3. Sign and date the IBR Request (and your spouse has signed and dated the form, if required) on page 2.
  4. Verify your spouse gave ACS (Organization Code 700006) authority to access his/her information on NSLDS, as explained in Section 3.
  5. Attach the required documentation, as explained in Section 5. Incomplete forms will not be processed.
  6. To avoid processing delays, please write your First and Last Name and Account Number on each page of your IBR Request and documentation.
  7. Mail or fax the first two pages of your completed IBR Request and documentation of your income to:

    ACS Education Services
    P.O. Box 7777
    Utica, NY 13504-7777
    Fax: 315-738-2232

Please allow 10-14 days after we receive the request to review and process your request. We will send you written notification of approval or denial of your request.

Log in to your account to use the document processing status calculator to estimate when your application will be processed.


Q: Will I be notified if my IBR application is approved?

Yes, you will receive written notification of the approval or denial of your IBR application. You may also verify approval by accessing our web site at www.acs-education.com. Please allow us 7 to 10 business days from the day we receive your application to review and process your request.

Example 1 – John

With only having a part-time job, John struggles to pay all of his bills. He has an adjusted gross income of $16,000 which is less than 150 percent of the poverty guideline for his state and family size, so his IBR payment is $0.

Example 2 – Jane

Jane just graduated from college and took a job making $25,000 per year. Under a 10-year repayment plan, the payments on her $20,000 in student loan debt are $230 per month, which equals $2760 per year. This exceeds 15 percent of the amount she makes above 150 percent of the poverty line for her state and family size. Therefore, she qualifies for IBR.

Example 3 – Sally and Bob

Sally and Bob are married, file their taxes jointly, and have a combined annual gross income of $50,000 per year. Sally has $40,000 of student loan debt (Bob has none), with a total monthly payment of over $450. Based on their combined debt, annual gross income, and family size, Sally and Bob qualify for IBR.

Example 4 – Frank and Beth

Frank and Beth are married and file their taxes jointly. Both have student loans, with a total combined debt of $75,000, giving them a total monthly payment amount of $863. They have a combined annual gross income of $80,000 and two children. Based on their combined debt, annual gross income, and family size, Frank and Beth qualify for IBR.