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IBR Algorithm

How do I know if I can use IBR?

Income-based Repayment (IBR, 2009) is loan-type specific only 

  • DIRECT & Federal Family Education Loans (FFEL) qualify for payment under IBR
  • HPSL, LDS, Perkins loans can be consolidated into a DIRECT Consolidation loan and paid under IBR
    • HPSL = Health Professions Student Loans
    • LDS = Loans for Disadvantage Students
  • You can consolidate a federal loan that has already been consolidated
  • You can begin the Federal Direct Consolidation process at studentloans.gov
  • You have to include at least one Direct loan to consolidate HPSL, Perkins or LDS loan types.

Income-based Repayment (IBR, 2014) is borrower and loan-type specific

  • IBR was changed by law for those "new borrowers" who received their first Direct loan as of July 1, 2014
  • Only Direct loans received by these "new borrowers" can be repaid using IBR, 2014.
  • If you qualify for IBR, 2014 your should choose PAYE instead!
    • Interest that can be capitalized under PAYE is capped at 10% of your starting repayment balance
    • There is no interest capitalization limit under IBR, 2014
  • Review the Income-Driven Repayment plan chart before selecting your plan

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