The Income-Based Repayment (IBR) Program allows borrowers to repay their federal student loans with a monthly payment that reflects their overall financial circumstances. Borrowers in the IBR program can even have the remainder of their loans forgiven after years of current payments. It’s probably the best option for people struggling to repay federal student loans, which now exceeds $1 trillion nationally. Unfortunately, the nation’s largest servicer of federal student loans, Sallie Mae, is failing to enroll as many borrowers into the program as are eligible. An analysis by the Huffington Post shows that relatively few of the loans serviced by Sallie Mae and eligible for IBR are enrolled in the program. The exact cause of Sallie Mae’s poor performance in enrolling borrowers into the program is unknown but Sallie Mae’s president suggested that helping borrowers take advantage of the income based repayment plan is too expensive.
According to the Huffington Post article, Sallie Mae has other problems also. The U.S. Department of Education has announced that of the four companies used by the Department to service federal student loans, Sallie Mae will be given the fewest number of loans to administer next year. Sallie Mae’s contract with the Department of Education also expires next year and there are many people recommending that the contract not be renewed because of the company’s poor performance in helping borrowers. If you’re facing student loan problems contact us to discuss what options, including the IBR might be available.