Washington, D.C.) – Today, U.S. Senator Patty Murray (D-WA) announced that a student loan repayment option that she voted to implement will soon be available to students in Washington state and across the nation. The new repayment option, the Income Based Repayment (IBR) Plan, provides caps on monthly loan repayments based on an individual’s income.
“Especially in this economy, we need to give students options to repay their loans that don’t break the bank,” said Senator Murray, a senior member of the Senate Health, Education, Labor, and Pensions (HELP) Committee. “By allowing income-based loan payments we will give students a pathway to success before they are buried in debt.”
The IPR Plan becomes available to students with federal loans on July 1st. Under the IPR Plan a student’s monthly loan payment would be capped at 15% of the student’s income.
Income-Based Repayment applies to federal student loans made under either the Direct Loan or Federal Family Education Loan (FFEL) program. The eligible loans can be new ones just entering repayment or existing loans that are already in repayment. The loans covered under the program could have been used to pay for any type of education, including undergraduate, graduate, professional and job training. The IBR plan does not apply to loans currently in default, parent PLUS loans, or private student loans.
For more details on the program visit: http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRPlan.jsp
Senator Murray helped pass this provision as part of the College Cost Reduction and Access Act in 2007.