"Trump's "big beautiful" spending legislation included a provision to remove the financial hardship requirement, which meant that the borrower's monthly payment had to be less than the amount needed to pay off their full balance over a 10-year period. Now that the update is complete, borrowers with higher incomes should soon become eligible to enroll in IBR plans."
"IBR plans give borrowers monthly payments based on their incomes, with student-loan forgiveness after 20 or 25 years, depending on when they first took out the loan. Specifically, borrowers who took out loans before July 1, 2014, will receive IBR payments based on 15% of their income with a 25-year repayment period. Borrowers who took out loans after that date will receive payments based on 10% of their inco"
On December 22, the Department of Education completed an update to income-based repayment (IBR) plans that removes the partial financial hardship requirement for enrollment. The change stems from a provision in recent spending legislation and ends the rule that a borrower's monthly payment must be less than the 10-year payoff amount. Borrowers with higher incomes should become eligible to enroll in IBR plans and are encouraged to reapply through the online income-driven repayment application. Servicers will process held applications in received order. IBR bases payments on income and offers forgiveness after 20 or 25 years; pre-July 1, 2014 loans use 15% with 25 years, later loans use 10%.
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