Government student loans help

[ninjamike81]

Hi.  I just looked at my student loans they are through uncle Sam DIRECT LOANS.  There is 4 of them totaling 16k+.  I was clicking around the myedaccount site and found a lower my payments tab.  I qualify for a Income based repayment option.  With that plan it gets based off my income for the past year and the current situation.  I was injured at work on Jan 6 2012 currently going through a workman's comp case"nightmare".  After I fell at work I was terminated a week later due to lacking job performance because of my injury.  I am now on unemployment scheduled to stay on until 1/24/2014.  With the IBR plan it shows I will have a payment of 0.00 because of family size 4ppl and income below poverty level in Maryland.  Last year I made 19k.  It will lower my payments but the amount owed will consistently go up due to interest.  In the ibr plan its for 25 years instead of 10yrs of a pmt $187.11.  Is this a smart option for me.  Anything left after the 25yr period will be forgiven and payed by uncle Sam.  I plan on paying whatever I can on  top of the minimum payment required.  I don't want to owe it for 25 years but I think it gives me a better shot of never missing a payment.  Witch is what IM worried about now because being out of work injured.  Its hard to make current household bills plus mine and my wife's student loan payments totaling over 350 monthly just for the student loans. 

1) I guess my question is financially is this a smart move short and long term.

2) is this a smart move for my credit report also. 

thanks for any input you can offer  

mike

[ninjamike81]

Any suggestions

[llecs]

If I was in the position, I would get a job now and stabilize the finances before making a committed decision like that. 

[ninjamike81]

im not cleared to work from workmans comp.  thiat whats causing all the issues right now

[llecs]

I can't speak to your medical, but I "think" you can ignore the advice and work, though losing any future benefit. My advice is marginal here and should be checked elsewhere. I mention this because I had an employee slip and fall on the job. I told him to file a WC claim and that we'd take care of him. Per our laws, the benefit was much less than his paycheck and he was eager to return. Despite the WC docs telling him not to work, he wanted to anyway and we weren't going to stop him. There were no issues with his medical situation. They told him not to work for 3 months when he only needed a couple weeks off to recoup. Just mentioning this as an FYI...certainly not saying to work when you can't.

If sticking with WC, I would recommend waiting until you return to make any decisions. Maybe you aren't 100% and need to take more time off. Maybe there's a job situation. Whatever. In any case, you wouldn't want to sign an agreement if there could be a repayment issue.

[Anonymous]

I don't see how this could be detrimental to you; you're paying $350 a month currently and now that you're injured and not working your income is below poverty level. Am I understanding that right?

If you're trying to preserve your credit, lowering your payments isn't a terrible idea if it helps you to not ever ever be late/miss one. You may want to research the tax ramifications for you & your wife. There's a pretty decent breakdown here:

http://www.studentloanborrowerassistance.org/repayment/repayment-plans/

I would say that if you do this, be aware that you'll need to submit paperwork every year. If you don't, you run the risk that payments will increase. Just be aware.