Do borrowers still have to pay interest on student loans with the Income-Based Repayment?
The answer depends on your situation. In some cases, your new, reduced student loan payment may not cover the interest that has accrued on your student loans. If that’s the case, the government will pay that interest on your Subsidized Stafford Loans for the first three years you take part in the Income-Based Repayment plan. After three years, and for all other loan types that are part of the plan, the interest will be added to the total amount you owe, just like any other type of loan repayment. This means that your debt may grow if your reduced payments are low enough. However, any interest you still owe after 25 years of making qualifying payments will be forgiven. What are qualifying payments? Qualifying payments count toward the Income-Based Repayment 25-year forgiveness period. They include: • Student loan payments made in the Income Contingent Repayment plan before July 1, 2009 • Any student loan payment made on or after July 1, 2009, in the Income-Based Repayment Plan, the Inco
