Overview

Income-Based Repayment (IBR) is designed to reduce monthly payments to help borrowers make student loan debt manageable. To qualify for IBR, borrowers and cosigners must demonstrate financial hardship based on current wages and family size. Financial hardship can be demonstrated when the monthly payment amount required to pay RISLA's non-federal loans under a standard repayment plan is higher than the monthly amount under IBR. IBR payment amounts may increase or decrease each year based on the income, family size, and location of the borrower and cosigner. Once initially qualified for IBR, RISLA non-federal loans of the qualified borrowers and cosigners are automatically extended to have repayment terms up to twenty-five years. That repayment term begins from the initial repayment date and excludes any periods of deferment or forbearance. Similar to the federal IBR program, if a RISLA IBR borrower and cosigner no longer qualifies for reduced payment, the subsequent required monthly payment will revert back to the initial standard repayment amount that the borrower and cosigner agreed to in the Promissory Note. 
 
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Do I qualify for IBR? Click here or the calculator above to see if you are eligible and to access the IBR application!

Please note: You will need your cosigner's information for the calculator to most accurately determine eligibility
 
 
Learn more about IBR:
  1. How to Apply
  2. Eligible Loans
  3. Monthly Payments
  4. Advantages of IBR
  5. Disadvantages of IBR
  6. How is the Monthly Payment Amount Calculated During Eligible IBR Periods?
  7. 2019 U.S. Federal Poverty Guidelines

How to Apply

  1. Use the IBR payment calculator to determine your eligibility.
  2. If eligible, according to the calculator, submit the IBR Application.

Eligible Loans  

All non-federal RISLA loans. 

Monthly Payments  

Under this plan, monthly payments are calculated: 
  • Based on the income and family size of the borrower and cosigner
  • Adjusted each year, based on changes to annual income and family size
  • Never more than the standard repayment amount at the time of election of IBR
  • The repayment term is never more than 25 years after the beginning of the repayment term under the note

Advantages of IBR 

Pay based on what you earn

Under IBR, monthly payments will not exceed 15 percent of the discretionary income of the borrower and cosigner and will never be more than the amount required to pay under the Standard Repayment Plan, and may be less than under other repayment plans.  

Limitation on the capitalization of interest

During any IBR payment period, interest does continue to accrue. If the IBR payments are not enough to pay the current accruing interest, the interest will not be capitalized (added to the principal of the loan) until the end of the last qualified IBR repayment period.  

25-year forgiveness

If the loan balance is not paid in full at final maturity any remaining balance will be forgiven after 25 years of qualifying repayment. Periods of forbearance and deferment other than IBR payments are not qualifying periods of repayment.  

Retain eligibility for RISLA's Loan Forgiveness Programs

Enrolling in an IBR plan will not disqualify a borrower from RISLA's nursing, nurse educators, Internships, and other loan forgiveness programs.  

Disadvantages of IBR 

The borrower(s) may pay more interest

A reduced monthly payment generally means the  repayment period will be extended. As in the federal IBR program the borrower(s) will likely pay more total interest over the life of the loan compared to a 10 or 15 year repayment plan.  

The Borrower and cosigner must submit annual documentation

The borrower and cosigner will be required to submit updated documentation to RISLA each year. If documentation is not received or not adequate to determine eligibility for IBR, the monthly payment amount will be changed to the amount required to pay under the Standard Repayment Plan of the loan prior to enrolling in IBR. This amount will be higher than the prior IBR payment that was based on the borrower’s and cosigners' income. In addition, if the borrower(s) do not provide the required income documentation, the IBR period will end and unpaid interest will be capitalized (added to the loan principal). Refer to the IBR application to see a list of required documentation.  

You may have to pay taxes on any loan amount that is forgiven after 25 years

Consult your tax advisor on whether loan forgiveness is taxable.  

How is the Monthly Payment Amount Calculated During Eligible IBR Periods?  

Under RISLA’s Income-Based Repayment Plan (IBR), the amount required to be repaid each  month is based on the Adjusted Gross Income (AGI) and family size of both the primary borrower and cosigner. If either borrower is married and files a joint federal tax return with their spouse, the AGI  includes both the borrower’s income and their spouse’s income. The annual IBR repayment amount  is 15 percent of the difference between the primary borrower’s AGI and 150 percent of the  Department of Health and Human Services (HHS) Poverty Guideline for the family size and state. In  addition, 15 percent of the difference between the cosigner’s AGI and 150 percent of the HHS  Poverty Guideline for the cosigner family size and state. The primary borrower and the cosigner IBR repayment amounts are added together to determine the total IBR annual payments. This amount is then divided by 12 to get the monthly IBR payment amount. Income-Based Repayment is based on the adjusted gross income during the prior tax year.  
 
Family size is strictly determined by whatever family size is indicated on an IBR applicants’ prior year tax returns.  If married and filing separately or if joint custody of children captures family size differently than current living situation, please note that family size is derived solely from tax returns and word of mouth variations are not acceptable.  If one or more children are born increasing the family size since the prior year’s tax returns, providing one or more birth certificates is acceptable to show the increase in family size

Certain borrowers may have multiple cosigners on their loans. Under those circumstances, RISLA will prorate the cosigner's income based on the non-federal RISLA loan balances between the individual RISLA non-federal loans incurred by the borrower.  

Some cosigners may have cosigned on two or more eligible non-federal RISLA loans. Under those circumstances RISLA will prorate the cosigner's income based on the loan balances between the non-federal RISLA loans incurred by other primary borrowers. The minimum monthly payment under the IBR program is $10 per month.

2019 U.S. Federal Poverty Guidelines 

The following chart was constructed using the 2019 U.S. Federal Poverty Guidelines for the 48 contiguous states and the District of Columbia that were in effect as of January 11, 2019. The 2019 Poverty Guidelines for Alaska and Hawaii are not shown below but are available in the IBR calculator. Borrower and cosigner's estimated monthly payment amounts should first be calculated separately and then added together for an estimated monthly payment amount under RISLA's IBR program.
 
Family size is strictly determined by whatever family size is indicated on an IBR applicant's prior year tax returns. If married and filing separately or if join custody of children captures family size differently than current living situation, please note that the family size is derived solely from tax returns and word of mouth variations are not acceptable. If one or more children are born increasing the family size since the prior year's tax returns, providing one or more birth certificates is acceptable to show the increase in family size.
 
Example: If the borrower has a Family Adjusted Gross Income of $35,000 and a family size of 3, the estimated monthly payment amount would be $38. If the cosigner has a Family Adjusted Gross Income of $55,000 and a family size of 2, the estimated monthly payment amount would be $370. Therefore, the estimated monthly payment amount would be $38 + $370 = $408.
 
Estimated Monthly Payment Amount Under IBR
  Size of Family
Family Adjusted Gross Income 1 2 3 4 5 6 7 8
$10,000 $10 $10 $10 $10 $10 $10 $10 $10
$15,000 $10 $10 $10 $10 $10 $10 $10 $10
$20,000 $16 $10 $10 $10 $10 $10 $10 $10
$25,000 $78 $10 $10 $10 $10 $10 $10 $10
$30,000 $141 $58 $10 $10 $10 $10 $10 $10
$35,000 $203 $120 $38 $10 $10 $10 $10 $10
$40,000 $266 $183 $100 $17 $10 $10 $10 $10
$45,000 $328 $245 $163 $80 $10 $10 $10 $10
$50,000 $391 $308 $225 $142 $59 $10 $10 $10
$55,000 $453 $370 $288 $205 $122 $39 $10 $10
$60,000 $516 $433 $350 $267 $184 $101 $19 $10
$65,000 $578 $495 $413 $330 $247 $164 $81 $10
$70,000 $641 $558 $475 $392 $309 $226 $144 $61
$75,000 $703 $620 $538 $455 $372 $289 $206 $123
$80,000 $766 $683 $600 $517 $434 $351 $269 $186
$85,000 $828 $745 $663 $580 $497 $414 $331 $248
$90,000 $891 $808 $725 $642 $559 $476 $394 $311
$95,000 $953 $870 $788 $705 $622 $539 $456 $373
$100,000 $1016 $933 $850 $767 $684 $601 $519 $436

 

If IBR is the right choice for you, click here to apply.