Please stay tuned for a friendly public service announcement ...
Are you, like me, still working to pay off the federal student loans that helped you get through college? Is that standard 4-15% of your income an awfully large amount each month?
If so, have you heard about the government's new Income-Based Repayment (IBR) plan?
I first read about IBR on a parenting message board several months ago. At the time, we called our lender and the customer service folks had no idea what we were talking about. In trying to restructure our budget (again) to make each dollar stretch just a little bit further, I went on the lender's website today and found a whole section on this program, including a calculator that indicates our estimated monthly payments based on our annual income and family size.
According to their calculations, by taking advantage of IBR we could be saving more than $400 per month off the standard monthly payment--with no additional accrual of interest. Now, we're not actually paying the standard amount right now, so, sadly, I won't have another $400 a month in the budget. Still, the fact that our loan will not be getting larger each month, simply because we aren't able to pay the full calculated payment is fantastic news!
For more information about IBR, check out the Federal Student Aid website, or contact your lender.