QUESTION: Should I apply for income based repayment plans?

ANSWER: Yes, always apply every year for each loan you have. Income based repayment plans allow you to pay what you can afford on your student loans. To greatly improve your odds of wiping out your student loans in bankruptcy, you should apply for repayment plans every year. For federal loan repayment options, click here. Your private loans may not offer income based repayment options – apply anyway. And keep copies of your letters requesting income contingent repayment options.

Income Based Repayment Plans

Ask all your student loan companies about income based repayment options, even if they are not currently available to you. Click here to learn about repayment plans for federal loans.

Income and Expense Budgets

Keep all copies of the letters you send asking about repayment options. You may need to show them to the court later.

Provide your lenders copies of your most recent tax returns and your monthly budgets. View sample monthly income and expense budgets.

If your income is low, your federal loan repayment plan payments will often be zero. Private student loans often do not offer repayment plans based on income.