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New Student Loan Forgiveness?

Frequent Contributor

New Student Loan Forgiveness?

http://finance.yahoo.com/news/student-loans-killing-heres-little-165103390.html

 

This article talks about forgiving debt after 25 years AND interest accrued on the loans AND reduced monthly payments?

 

Is this for real?

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Message 1 of 9
8 REPLIES
Established Contributor

Re: New Student Loan Forgiveness?

Yes - this is not new.

http://studentaid.ed.gov/repay-loans/understand/plans

 

Many of us who have defaulted enter into either an ICR or IBR program after rehabilitating. Myself included.

Message 2 of 9
Established Contributor

Re: New Student Loan Forgiveness?


InvincibleSummer3 wrote:

Yes - this is not new.

http://studentaid.ed.gov/repay-loans/understand/plans

 

Many of us who have defaulted enter into either an ICR or IBR program after rehabilitating. Myself included.


+1. I am now enrolled into an IBR, I pay $132/month on $100K. I am also pursuing the public service debt forgiveness program as I work in the non-profit social services field. The IBR counts as one of the appoved payment plans for debt forgiveness so long as 10 years of on time payments are made. It's very likely that I will have nearly six figures of student loan debt forgiven at the end of it all.

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Message 3 of 9
Member

Re: New Student Loan Forgiveness?

I looked at a couple routes... I work for a tribal government, so that actually drops it down to like 10 years. However, you have to be on an income-based repayment plan or the standard plan (I believe) for it to count...

 

Standard plan pays it off in like 10 years -- no real benefit. IBR... I don't make a lot, but at 60K/yr, I would essentially be paying the same monthly payment as the standard plan. I can see how this would help someone with very low income but substantial loans.

Message 4 of 9
Established Contributor

Re: New Student Loan Forgiveness?

Exactly. And it's not that I would mind getting some of the loans forgiven, but I was sorta hoping to be making more money within the next 25 years. Smiley Sad

 

I only have about 15k in loans, though, so I'm pretty sure I'll be able to pay things off.

Message 5 of 9
Regular Contributor

Re: New Student Loan Forgiveness?

One of the unfortunate things about IBR is that what is considered discretionary income is totally formulaic.  It doesn't take into account, for example, mandatory monthly payments on private student loans.  I understand the policy reason behind that (i.e., why should private companies get paid their money before the government get its money?) but there are far fewer options for lowering or deferring private student loan payments, so "discretionary" is really a misnomer.


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Message 6 of 9
Established Contributor

Re: New Student Loan Forgiveness?


lolabelle wrote:

One of the unfortunate things about IBR is that what is considered discretionary income is totally formulaic.  It doesn't take into account, for example, mandatory monthly payments on private student loans.  I understand the policy reason behind that (i.e., why should private companies get paid their money before the government get its money?) but there are far fewer options for lowering or deferring private student loan payments, so "discretionary" is really a misnomer.


My servicer took into account my small $50 a month payment to Sallie Mae so I ended up with $132/month under the IBR. It's a stretch considering that I am one person supporting a famly of 4 and live in a very high cost area (NYC Metro) but its better than the $700 standard payment. According to them the only high cost areas are Alaska and Hawaii.

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Message 7 of 9
Established Contributor

Re: New Student Loan Forgiveness?

I've lived in both states, and they are high, but you'd think they would take into account cost of living in places like NYC & San Francisco. I have a friend living there and her expenses are not to be believed.

Message 8 of 9
Regular Contributor

Re: New Student Loan Forgiveness?

Here, as well (Washington, DC). It's nuts.

Starting Score: 732 (EQ)
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Message 9 of 9