Forbearance or IBR?

These two options will help you out with your student loan bills while you serve. You can learn the specifics of forbearance and Income-Based Repayment (IBR) elsewhere.
Advantage: Forbearance
The interest on your federal student loans that gathers during your term is paid after you complete service. Your loan balance returns to its pre-service level.
Advantage: IBR
You make low (or even $0) monthly low payments, and the months of your service will count toward Public Service Loan Forgiveness. After 10 years (120 months) of full-time employment at a nonprofit or government agency, your loan balances are forgiven. If you are in forbearance and not making loan payments, the months you serve will not count toward the 10 years unless you make a lump sum payment. See the forbearance and forgiveness page to learn more.
Advantage: Forbearance
If you choose IBR but don't plan to work at a nonprofit or government agency for 10 years, the student loan interest you avoid paying while serving will snowball later if your income increases over a certain amount. (Check out LendEDU for more information and resources, and an income calculator.)
Advantage: IBR
Forbearance ends when your service ends. Your IBR status is reviewed once a year, and your loan payments stay low as long as your income is low.
To recap, here are considerations when making your decision:
Forbearance has potential of working well:
  • For members who do not think they will work 10 years with a nonprofit or government agency
  • For members who expect their household incomes to spike within a few years after completing service
IBR has potential of working well:
  • For members confident they will work 10 years at a nonprofit or government agency
  • For VISTAs electing not to receive an education award (and are ineligible for forbearance)

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