Choosing an Income-Based Repayment Plan For Direct Loan Consolidation

Direct loan consolidation is an excellent option thatMonthly payments under this repayment plan are
allows borrowers to consolidate their existing studentcapped at fifteen percent of discretionary income.
loans. This is especially beneficial for those who areDiscretionary income is the difference between 150%
managing two or more loans. By consolidating theof poverty guideline for your state of residence and
loans, it is possible to reduce the strain of monitoringsize of family and your AGI or Adjusted Gross
repayments. Direct consolidation offers a variety ofIncome.
flexible repayment options and renewed defermentsFor those who file separate taxes and are married,
as compared to private loan consolidation.direct loan consolidation income based repayment plan
If you continue paying back student loans and arewill consider only the income for calculating the amount
presently employed, you can opt for the IBR Plan orfor IBR payment. In order to be eligible for this plan of
the Income-Based Repayment Plan. Under this plan,repayment, it is necessary to authorize the IRS or the
your yearly income is taken into account to determineUS Internal Revenue Service who will then inform the
your monthly repayment. In order to enroll for thisDepartment of Education, US the exact amount of
program, you must have financial hardship, at leastincome you earn.
partial.You can obtain further information through the direct
As an alternate to the ICR or Income Contingentloan servicing center that will also help with the loan
Repayment, this plan is designed in such a manner thatprocess and management. Check if you are eligible for
it is easy for students to repay loans even if they landincome based repayment option as you reach out for
in a job that pays less such as public service careers.direct loan consolidation.