Income-Based Repayment of Student Loans: If Only Borrowers Knew

Income-Based Repayment of Student Loans: If Only Borrowers Knew 1

Brian Wedge for The Chronicle

To Kerri Padgett, who finished veterinary school in 2009, income-based repayment of her student loans sounded like a good idea. Qualifying for the federal program required a months-long approval process, but the reduced monthly payments on her loans give her "more wiggle room" in her budget, she says.

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close Income-Based Repayment of Student Loans: If Only Borrowers Knew 1

Brian Wedge for The Chronicle

To Kerri Padgett, who finished veterinary school in 2009, income-based repayment of her student loans sounded like a good idea. Qualifying for the federal program required a months-long approval process, but the reduced monthly payments on her loans give her "more wiggle room" in her budget, she says.

Everyone worries about deeply indebted college graduates with poor job prospects. Yet a program that helps those very borrowers, letting them repay their loans on the basis of how much they make, gets little attention.

For a few years now, the government has allowed borrowers whose federal student-loan debt is heavy relative to their income and family size to choose income-based repayment. In that program, they can make smaller monthly payments, and, if they meet certain conditions,