White House and Education Department (ED) officials recently announced a new tool aimed at streamlining the application process for the Income-Based Repayment (IBR) Program. The new "IBR Retrieval Tool" is designed to operate like the Internal Revenue Service (IRS) Data Retrieval, allowing borrowers to access the IRS website from the IBR application and import their tax data. Borrowers should also be able to directly import their loan information from ED.
The tool is currently available to borrowers who only have Direct Loans, or have at least one Direct Loan and at least one Federal Family Education Loan (FFEL) that are eligible to be repaid under current IBR criteria. In the coming months, the tool's availability will be expanded to borrowers who have only FFELP loans. In addition, the tool will be accessible to students who are seeking to re-certify their IBR application. Borrowers will be able to access the application and corresponding tool through the website of their servicer(s) and also though ED’s studentloans.gov website.
Under current IBR criteria, eligible borrowers will pay no more than 15 percent of their discretionary income and receive loan forgiveness at the 25-year mark. Beginning in 2014, eligible borrowers will pay no more than 10 percent of their discretionary income and receive loan forgiveness after 20 years.
ED and White House officials have been concerned for some time about the lack of up-take in the IBR program, citing reports that many eligible borrowers found the IBR application process difficult, time-consuming, and a hindrance to enrollment. In order to facilitate conversations about how ED and IRS could work together on this issue, President Obama issued an Executive Memo earlier this year asking that the agencies find a solution to streamlining the application process. The IBR Retrieval Tool was a result of these discussions.
Officials hope that the new tool will increase the number of eligible borrowers who participate in IBR. They encourage institutions and groups that work closely with students to remind them of the IBR repayment option and share information about this new tool with them.
Publication Date: 10/24/2012