Student Loan Repayment Information for Entrepreneurs

You have a choice of several repayment plans that are designed to meet your needs. The amount you pay and the length of time you have to repay your loans will vary depending on the repayment plan you choose. Go to the Repayment Plans and Calculators page for more information about the various repayment plans and to calculate your estimated repayment amount under each of the different plans.

Income-Based Repayment (IBR) is one of several repayment plan options for borrowers of student loans made under the William D. Ford Federal Direct Loan (Direct Loan) Program or the Federal Family Education Loan (FFEL) Program. Under the IBR plan your monthly payment amount is determined based upon your income. Under IBR your required monthly payment will be capped at an amount that is intended to be affordable based on your income and family size, and will be less than what you would have to pay under a 10-year Standard Repayment Plan.

Generally, your eligibility for IBR and your monthly IBR payment amount is based on your income as shown on your most recently filed federal tax return and your family size. However, your financial circumstances may have changed since you filed your last federal tax return and your most recent tax return may reflect an income that is significantly higher than your current income – for example, if you recently lost your job or you have started a new business. In these situations you should inform your Federal student loan servicer of the change in your financial circumstances. Your servicer can then determine your IBR payment amount based on alternative documentation of income you provide that more accurately shows your current income. This could reduce the amount you are required to pay each month under IBR.

For more information about IBR, go to the IBR Plan information page.

Coupled with IBR, Public Service Loan Forgiveness (PSLF) can help borrowers effectively manage repayment of their Federal student loans while starting a non-profit organization. Payments made under IBR while employed by a qualifying organization count toward the 120 payments required to receive loan forgiveness under the PSLF. Under this program, the remaining balance of your eligible Direct Loans may be cancelled after you have made 10 years of payments on those loans under IBR or certain other repayment plans. For more information about PSLF, go to the PSLF information page.