The longer you have your federal loans, the longer time your interest has to accrue. And the more time your interest has to accrue, the more you’ll pay in interest.
Federal student loans are particularly brutal when it comes to interest: they start accruing interest from day one.
And once they start accruing interest, they don’t stop.
On top of that, federal student loan interest is calculated on a daily basis. Depending on your interest rate, your loan balance can double or triple while you’re in the IBR plan.
So what should you do? Stay in the IBR plan or pay your loans off faster?
The answer depends on a host of factors:
Typically, my advice is that the larger your loan balance and the smaller your income and retirement/savings, the more inclined you should be to stay in the income-based repayment plan.