Whats the difference between the Income-Sensitive and Income-Based Repayment Plans?
Both the Income-Sensitive Repayment and the Income-Based Repayment Plans are intended to help ease the monthly repayment burden for borrowers with lower incomes. Under an Income-Sensitive Repayment Plan, your monthly payment is adjusted annually, based on a percentage of your gross monthly income. Payment must equal at least the monthly interest accrual. You must reapply each year and provide reasonable documentation of your income, such as a copy of your income tax return, pay stub and/or W-2 statement. Income-sensitive repayment decreases your monthly payments, but repayment is generally tied to a 10-year repayment term. Therefore, the size of the later monthly payments will be larger and the total amount of interest paid over the life of the loan may increase. On July 1, 2009, an Income-Based Repayment Plan will also be available for borrowers with Stafford, Grad PLUS and consolidation loans (that are comprised of Stafford and Grad PLUS loans), who are experiencing partial financial
