Can someone check into this Income Based Repayment Loophole?

[Anonymous]

 According to the rules for IBR, if a person qualifies for IBR their monthly payments can be anywhere from $0 to 15% of their income, also according to the rules, after 25 years of faithful payements, the rest of the loan is forgiven.

 Now does this mean that if John Doe qualifies for IBR and his IBR payments are $0.00 per month, and he continues to qualify for IBR each year, after 25 years will the loan be forgiven without him paying one penny?

 According to the rules I read, I would tend to say yes.

 Their would be some negatives, your balance would increase but payments would be 0 (in his case) so John's score would take a hit.

 After 25 years, if forgiven, would count as taxable income and may cost someone their social securtiy disability and SSI checks for making

too much money.

  It seems silly, how can a person make faithful payments of $0.00??

  This could actually be true though, I have found that the IBR applications are usually buried very deep within the lender's site making them quite hard to find at times.

  Anyone want to check up on this as it may be an option for some.

  Oh, Federal SL only, of course.

[laz98]

i've wondered about this myself, but i doubt it's that simple.  people would just be unemployed forever.  for example, i'm not working now, so i'm sure i would qualify for $0 payments.  but i doubt that i'll be able to avoid working forever!

personally, i'm not an expert at all, but i doubt my scores would take much of a beating just from student loans.

[SCF]

If you could find a way to stay under the income guidelines for 25 years, I think you could have the entirety of your loan balance forgiven, but I doubt that most people could do that and still get by.  Eventually, you'd need to seek additional employment and that would increase your payment.

[Homebuyer24]

This is a very possible loophole.  The even bigger loophole (which I am grateful for) is the possibility of doing it based on income of married but filing separately.  I know a couple that got married--both drs, both probably with massive student loans (private school)--however the wife stopped working once they decided to have a family--she could easily have 100K of student loans forgiven as long as they do their taxes as married filing separately--it would not count the spouse's income at all--so in a scenario like this, a person could get all of their student loans forgiven if they end up married and not working. 

I just did IBR using married but filing separately because if they counted my husband's income (who doesn't pay towards my loans) they payment would've jumped dramatically--it sucks to file separately but the hope is to save money over the next ten years.

[Anonymous]

It may be hard for me, I don't file taxes because I never made enough and I have been on SSI & SSDI, I know the SSDI counts as income because it kills my SSI check. Though the state my count both checks as income.

 I am looking for an I-T job but with the economy the way it is, it may not happen even though I have a degree in it.

  I've been doing hardship deferments for the last two years. Although if I qualified for IBR, only the last deferment would count towards the 25 years.

  There is also another one wich is based on income and also forgives the loans after 25 years but doesn't require tax forms but I can't think of the name.

[laz98]

i wish i could just "wait" my student loans right off my shoulders!  that would be wonderful.

(damn this firefox glitch.......cannot use apostrophes in text boxes!!!)