If you have Federal Loans, what is an IBR, PAYE or ICR?

If you have Federal Student Loans, you may know that IBR means Income Based Repayment. You may also have heard of the PAYE Program, which stands for Pay As You Earn. Or, if you have an older Federal Student Loan, you may have heard of ICR which is the abbreviation for Income Contingent Repayment. These are Plans that students can use to reduce their student loan monthly payments based on what they can afford as their income changes. Which of these three programs may apply to you is based on the type of Federal Loan you have and when you took out the loan. Which program applies to you will determine the percentage of your discretionary income that you will have to pay each month as well as your the length of payments until the balance of your loan is forgiven.

So, how can an attorney help you maneuver through this complicated system? As an attorney who deals with the government on Social Security Disability and bankruptcy cases, I am familiar with the government mazes and help steer people through the confusion and jargon. More importantly, the monthly payment you will be making is based on your “discretionary income”, according to the government website, StudentAid.ed.gov.

An attorney with bankruptcy experience deals with the issue of what is “discretionary income” on a daily basis in order to show why a debtor can not afford to repay his bills. If you have an attorney to help show why your income is so limited, you may be able to reduce the amount you pay per month. Plus, you should have an advocate explaining your situation, instead of you dealing directly with the person who is trying to collect your debt. In some circumstances, your monthly payment can even be reduced to zero.

If you have any questions on these repayment options, let me know.