This is by no means recommended by me, but I wanted to share my Direct Loans saga. In 2003, I decided to attend grad school to earn an MA and bump my pay up (I'm a public school teacher). I had never borrowed student loan money before, and really didn't have to for grad school, but after filling out the FAFSA they offered lots ($45k) of relatively free money. I had the best of intentions to invest it and pay it all back after 2 years, then my wife lost her job and we had to live off of it for a couple of years. After going into default and ignoring it long enough, it grew to over $60k, and I got the dreaded notice that they were going to tag me for 15% of my gross income. I called, and they had me send a ton of documentation to qualify for Income Based Repayment. It took about 4 months, and I was stunned to see that my new payment was $53 a month...no, I didn't miss a zero...really, $53 a month. After a year, they dropped all the late fees, etc., the loan was totally rehabbed, and they sold it to another lender. I immediately filed for teacher loan forgiveness ($17.5k)...took 3 months and goodbye 33% of my loan, which they applied as future payments, which makes my next payment of $53 due in January, 2042. I will continue making regular payments until I get to 120, then the rest goes away in Public Employee forgiveness right before I retire. The moral is, call them! Don't wait for them to tag you for 15%, but if they do, call them immediately. I hope this helps someone else get through student loan mess.
