Who Will Benefit from IBR?
The IBR program is best for students who will be pursuing public service careers and borrowers with high debt and low income (e.g., a debt-to-income ratio of 1.0 or higher for single borrowers). Having a large household size also helps. Borrowers who have only a short-term temporary income shortfall may be better off seeking an economic hardship deferment. If the borrower’s income is near or below 150% of the poverty line, the monthly payment under IBR will be $0. In effect, IBR will then function like the economic hardship deferment for the first three years and like a forbearance thereafter. Students who are not pursuing careers in public service may be intimidated by the thought of a 25-year repayment term. However, it is worth careful consideration, especially by students who might be considering using an extended or graduated repayment plan. IBR will likely provide the lowest monthly payment for many low income borrowers and certainly is a reasonable alternative to defaulting on t
