Saddled With Student Loan Debt?

Lower your payments with an income-driven repayment plan.

- Robin White Goode

WHEN DENESIA RODGERS SAW HER FIRST student loan bill after she completed graduate school, she “freaked out,” as she put it. Her federal loan payments for undergrad and graduate school, plus private loans she had taken out to fund her education, would total more than $2,000 a month. The graduate of Johns Hopkins University and Tufts University graduate school immediately called the number on her statement. “I asked what my options were besides the standard repayment,” Rodgers says. Her provider walked her through the options, and Rodgers chose the income-based repayment plan, or IBR, which provided her with the lowest monthly payment. She is one of the 12.5% of roughly 40 million federal loan borrowers to sign up for an income-driven repayment plan.

Now in IBR for three years, Rodgers recommends the plan to others. “My fear was that I wouldn’t be able to buy a house or a newer car. I wanted to enjoy the fruits of my labor and not be weighed down by a huge student loan debt,” she says.Although income-driven repayment plans have been around since the Clinton administration, the program is now much more expansive and offers four different plans: Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR).