Tips for the IBR Application

Income-Based Repayment (IBR) application draft form and "official" form

Lenders in the Family Federal Education Loan (FFEL) program, where private lenders make federal loans, have been using a draft IBR application developed by the National Council of Higher Education Loan Programs. This draft form will likely be in use until early 2010, when the U.S. Department of Education is expected to finalize the "official" form. Those who apply using the draft form will not need to reapply when the official form becomes available. 

More information on the draft of the official form - which will be simpler to fill out - is available from the Federal Register (see "Att FFEL IBR Alt Doc.60-Day Draft" and "Att_FFEL IBR Request.60-Day Draft"). You can also read our recommendations to improve the official form. Your IBR application will be just as valid no matter which form you end up using.

IBR for multiple federal loans

If you have multiple eligible federal loans, you can still apply for IBR even if the loans are held by different lenders. There's space to list your loans on the FFEL IBR application currently in use. You can look up all your federal loan information in one place, the National Student Loan Data System. You'll need your FAFSA pin to log in; if you don't remember it you can request a duplicate pin at www.pin.ed.gov.

What is my "initial standard monthly payment"?

We've heard that some borrowers have trouble with Section 4 of the FFEL form currently in use, especially in column F where it asks that you fill in the "initial standard monthly payment" for all of your loans. That's the 10-year standard monthly payment on whatever you owed when you first went into repayment on a given loan: your principal including interest, divided by 120. Here's a calculator to help you determine this amount.

Proving your income to your lender

You'll need to fill out IRS form 4506-T, authorizing the IRS to share your Adjusted Gross Income (AGI) - or your joint AGI if you file taxes with a spouse - with your lender. Fill out this form and mail it to your lender along with your IBR application. If you file taxes jointly with your spouse, you'll both need to sign the form.

Alternative Documentation of Income

If your most recent tax return does not accurately reflect your current financial circumstances, or if you didn't file a tax return in 2008, you can request an "alternative documentation of income" form. You'll be asked to provide proof of your income (or lack thereof), such as pay stubs, bank statements, unemployment verification, etc. You have a right to fill out this form if you need it at any time, even if you're already in IBR.

 

Updated December 2009

Income-Based Repayment and Pay As You Earn are two ways to help keep monthly payments affordable based on your income and family size. Visit the Department of Education’s Repayment Estimator to find out what your payments might be.
 

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How to switch to the Direct Loan program

If your federal loans are in the Guaranteed (FFEL) program — where your lender is a private entity like Sallie Mae or Citibank — you can consolidate into the Direct Loan program to qualify for Public Service Loan Forgiveness. Even if you have already consolidated your loans in the FFEL program, you may re-consolidate into the Direct Loan program to take advantage of this program.

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