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Income-Based Repayment (IBR) is a way to make your federal student loan payments more manageable.  And if you're a teacher or work in government or at a nonprofit (501(c)(3)) organization, you might qualify for a new type of public service loan forgiveness (PSLF) after 10 years of eligible payments and employment.

  • Pay As You Earn Now Available For Eligible Borrowers
As of December 21, 2012, recent college graduates with federal student loans can apply to lower their monthly payments using the Pay As You Earn plan. This new repayment plan has a lower monthly payment cap than the more widely available Income-Based Repayment (IBR) plan. Pay As You Earn also provides forgiveness after 20 years of payments, rather than 25 years in IBR. President Obama recently proposed expanding Pay As You Earn to federal student loan borrowers who took out loans before October 2007 or those who stopped borrowing by October 2011. For more information about the expansion, read the White House fact sheet.

To learn more:
  • Apply for Income-Based Repayment and Update Your Income Online!

In June 2012, the White House announced it would streamline the application process for the Income-Based Repayment (IBR) plan, and we're happy to report that the new online application tool is now available at A key feature is that borrowers can retrieve and transfer their own tax information into the form electronically, speeding up the process for confirming eligibility and determining payment levels.

Whether you're first applying for IBR or just need to update your income information, this new tool will make it much easier for many borrowers to keep their loan payments manageable.

If your loan servicer is already participating, you can fill out the form, electronically transfer your tax information, and sign and submit the whole package online.

All Direct Loan servicers plus several others are already in the system, and the Department of Education has said it expects to have all servicers plugged in by next spring. But you don't have to know the name of your servicer to use the tool; it'll flag that for you and tell you how to proceed.

The new tool also provides information for married borrowers who file jointly, for borrowers whose income has changed significantly since their last tax return, and for those already in IBR to provide annual income verification using the IRS data retrieval process (something TICAS has urged since that process became available as part of the online FAFSA).

For more information, to apply for IBR, or to update your income information, visit

  • Why You Need to Know Your IBR Anniversary

If you're already in IBR, make sure your lender has updated income information for you before the annual anniversary of your enrollment in the program, so they can determine your payment for the next year. Missing your deadline can result in a much higher payment that doesn't take your income into account. Currently, lenders aren't required to notify borrowers about this crucial deadline. Borrowers have reported that it can take up to three months to process the paperwork, and processing delays can also trigger a high payment.

If you're unsure about your anniversary date or what type of documents you have to submit, contact your loan servicer for more information.

  • Employment Certification for Public Service Loan Forgiveness: Now You Can Track Your Eligibility

In January 2012, the Department of Education issued the long-awaited Employment Certification Form for Public Service Loan Forgiveness (PSLF). Direct Loan borrowers who work in the public and nonprofit sectors can now get confirmation that their job counts as qualifying employment for PSLF. Using this form will make it much easier to track your eligibility, know when it's time to apply for forgiveness, and have the paperwork you need in hand.

Visit the Federal Student Aid website for the Employment Certification instructions, fact sheet, and form.

  • Official FAQs
The U.S. Department of Education posted in-depth Q&As on both Income-Based Repayment (IBR) and Public Service Loan Forgiveness (PSLF) to their website. While some of the topics are also covered in our FAQ, we highly recommend that you read the Department’s as well if you have any questions about IBR or PSLF. We strongly encouraged the Department to provide this important information, and we’re very pleased that clear and thorough official answers to common questions are now available.

Income-Based Repayment and Pay As You Earn are two ways to help keep monthly payments affordable based on your income and family size. Visit the Department of Education’s Repayment Estimator to find out what your payments might be.

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