Income-Based Repayment Comes To Private Student Loans

For years, income-driven repayment has been a dividing line between federal and private student loans. Federal borrowers could tie monthly payments to income but historically, private borrowers could not.

That line is starting to blur.

RISLA (Rhode Island Student Loan Authority), a nonprofit student loan lender based in Rhode Island, has introduced an income-based repayment (IBR) option for borrowers who refinance student loans through the organization. The plan borrows heavily from the "old" IBR framework created in 2009, offering payment flexibility during periods of lower income and forgiveness after decades of repayment.

It is a small but notable shift in a private lending market that has traditionally emphasized fixed monthly payments and faster payoff schedules. As federal student loan policies continue to change, the question is whether other lenders will follow and whether borrowers should welcome them if they do.