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IBR (Income-Based Repayment)
Definition
An income-driven repayment plan capping payments at 10-15% of discretionary income with forgiveness after 20-25 years.
Explanation
For borrowers with pre-2014 loans: payments = 15% of discretionary income, forgiveness after 25 years. For new borrowers after July 2014: payments = 10% of discretionary income, forgiveness after 20 years.
IBR payments are capped at the standard 10-year payment amount. Has been largely replaced by PAYE/REPAYE for newer borrowers.
Example
Borrower with pre-2014 loans earning $50,000: IBR payment ≈ $450/month for 25 years, then remaining balance forgiven.