An Income Based Repayment (IBR) plan is a repayment plan with monthly payments that are limited to 15% (or 10% if you are a new borrower) of your discretionary income. Discretionary income for this plan is the difference between your adjusted gross income and 150% of the poverty guideline amount for your state of residence and family size, divided by 12. To initially qualify for IBR and to continue making income-based payments under this plan, you must have a partial financial hardship.
You are considered a new borrower for the IBR plan if (1) you have no outstanding balance on a Direct Loan or FFEL Program loan as of July 1, 2014 or (2) have no outstanding balance on a Direct Loan or FFEL Program loan when you obtain a new loan on or after July 1, 2014.