Tag Archives: StudentLoanRepayment

What to Know About Recertifying Your Income-Driven Repayment Program

The Department of Education offers four income-driven repayment (IDR programs) programs for federal student loan borrowers (IBR, ICR, REPAYE and PAYE). These programs limit your monthly payments to a percentage of your discretionary income. However, there is a universal rule that applies to these four programs—you must recertify your income each year to stay enrolled. Whatever you do, do not forget to recertify by the deadline! Here is a  hypothetical example which demonstrates some of the consequences of forgetting to recertify your student loans. What Could Happen If You Do Not Recertify Let’s say for example that you are enrolled in the IBR program, which limits your monthly payments to $117 per month. Your monthly payments under the standard 10-year repayment option would be $480 per month. You are also enrolled in automatic payments through your loan servicer, meaning your checking account is auto-debited each month. Then, for whatever reason,…
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Does Income-Based Repayment for Student Debt Work?

To default on your student loans, you need to miss around a year of payments. Here in the United States, approximately 1 million student loan borrowers hit that mark every year. However, there are signs that this trend is changing, and income-based repayment plans might be one of the reasons why. How Are Income-Based Repayment Programs Affecting Student Debt? The New York Federal Reserve is reporting that 9 percent of student loans are overdue by 30 days or more. Back in 2013, that number was 11 percent. That means fewer student loan borrowers are defaulting on their loans, and experts are pointing to several causes. Improvements in the economy is one of the reasons these experts believe these rates are going down. Plentiful jobs are resulting in more stable incomes, and while that’s keeping people from defaulting, job availability is not the only reason default rates are dropping. Income-based repayment…
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