Originally Posted by Minnerbelle
IBR = income based repayment plan. Even if you owe like $2-3k/month in student loans as a new grad based on your borrowed amount on even an extended 25 yr repayment schedule, IBR it caps the monthly repayment based on your income (something between 10-15%. I can't keep track of which it is at the moment). When you don't have a high starting income, only needing to pay like $800/month instead of the $2-3k is a lifesaver.
I don't have any additional information to add, as I've been lucky enough to avoid any loans for my undergrad so far, and am unfamiliar with the process. However, the thought of a 2-3k a month loan payment makes me want to puke.
Does anyone know if the IBR is based on your gross or your net income after taxes? Hypothetically, if someone landed a 60k a year job right outta vet school, 15% of their income would be $9750, or $812.50 a month. That same 60k a year job would realistically only bring home about $45,000 (worst case scenario) of which $6750 is 15%, leaving the monthly payment around $562.50. Not a HUGE difference, but I'm curious. I'm only a first year undergrad and I do the math for my hypothetical salary upon graduation and hypothetical student loan payment almost every day, I just keep looking at the numbers hoping they go down.
Also, how long has IBR been around? Has there ever been any chatter about it being repealed? If my loans reach the "average" levels of $120,000, I'll be making a $961.14 ( estimate based on finaid.com ) payment every month, and any and all information to help me wrap my brain around a smaller number would be appreciated.