Income-Based Repayment

Income-based repayment is an option effective July 1, 2009, for borrowers who experience a partial financial hardship (as explained below). Under this plan, your required monthly payment amount is determined by your annual gross income (AGI) and the poverty level associated with your family size and state of residence. If your total annual student loan payments are greater than 15% of the difference between your AGI and 150% of the poverty level applicable to you, you are considered to be experiencing a partial financial hardship and are eligible for the income-based repayment plan.

Example: For 2022, 150% of the poverty level for a family of one living in Texas was $20,385. A borrower with an AGI of $40,000 would have a partial hardship if their annual student loan payments were greater than $2,942 or $245 per month ($2,942 is 15% of the result from subtracting $20,385 from $40,000).

The maximum repayment period under this plan may exceed 10 years. If after 25 years of qualifying payments your student loan balance is not paid in full, your remaining balance will be forgiven. The income-based repayment plan is not available for a Parent PLUS Loan(s), consolidation loan(s) that repaid any Parent PLUS Loan, or any defaulted loan(s).