For some graduates out there swimming in student loan debt, student loan consolidation (or student consolidation loans) are simply not enough help to get student loan payments down to a manageable rate. If you fall under this category you may want to consider an income-based repayment plan.

So what is an Income-based repayment (IBR)?

An Income-based repayment, commonly referred to as an IBR, is a payment option plan for federal student loans only. The Income-based repayment plan helps student loan borrowers keep their student loan payments affordable by placing payment caps (based of income and family size) on your student loan repayments. A few more facts on Income-based repayment plans:

1. Student loan payments on Income-based repayment plans are (typically) less than 10% or the borrowers income.

2. If you still have a student loan balance after 25 years of payments the debt will be forgiven.

3. Income-based repayment plans are popular for medical school and law school graduates, because of their large student loan debts.

4. Income-based repayment plans are designed for students with a significant amount of debt and a low income.

5. Income-based repayment plans are for undergraduate degrees and graduate degrees.

So if you feel you are still at risk of missing loan payments, after attempting student loan consolidation and working with your lenders, you may want to look into an Income-based repayment plan.

Tags: bankruptcy / consolidation / credit / federal student loans / student loan debt / student loans

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