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Don’t make expensive mistakes when repaying student loans.  There are 4 main income based repayment programs for federal loans.

1- Deferment.  While your loan is in deferment you don’t make any payments; if your loan is subsidized you won’t accrue interest during deferment.  Interest not paid during deferment is capitalized (added to the balance and interest is charged on interest).

2- Forbearance.  If you don’t qualify for a deferment you might be eligible for forbearance; this lets you make payments or reduced payments for up to a year.  Interest will accrue and unpaid interest will be capitalized.

3- I.B.R. – Income Based Repayment.  If you qualify for this program the maximum monthly payment is 15% of discretionary income, using a specific formula; balances can be forgiven after 10, 20 or 25 years.

4- I.C.R. – Income Contingent Repayment.  Your monthly payments are pegged to income, family size and your balance; after 25 years the remaining balance is forgiven.

Research these programs and check out the government’s student loan website.