Income Based Repayment (IBR) is a plan that allows people with student loans to make payments on their loans based off income. There is a calculator online at http://studentaid.ed.gov/PORTALSWebApp/students/english/OtherFormsOfRepay.jsp to help you determine the amount you would need to pay per month. For example, a person making $25,000 dollars a year would be paying less than $40.00 a month towards their student loans. No matter what the total amount of loans you owe, your repayment plan is purely based off your current income. There are also two other great perks to this repayment plan: (1) if you work for an approved public service job for 10 years, and you have been making consistent payments on your loans, the rest of your loans will be forgiven, and (2), if you make consistent payments on your student loans for 25 years (and you do not work for a non-profit company), and you meet certain requirements, your remaining loans can be forgiven. These “certain requirements” seem somewhat mystical, and I have not been able to track down the exact details.

This is great news for anyone who is like me, and it took six years of private higher education to figure out that I do not want to enter into a career that provides lucrative financial payout, but rather one that is more focused in public service. I believe that this relatively new repayment plan is an amazing financial break for hundreds of thousands of Americans. I am no financial guru, and even though this plan sounds great to me, where is the money going to come from to forgive all the remaining amounts of these loans in 10, and then 25 years? I just hope that there is a plan for actually being able to forgive all these loans without the economy completely tanking when everyone’s time to have their loans forgiven comes along. This repayment plan sounds too good to be true, so I hope it is not like most things, and that it is actually a promising plan to improve the American economic situation.