Ford Foundation Loan Information

[Anonymous]

I am an older graduate and have loans with the Ford Foundation.  I was never able to get the high paying jobs promised and now find myself with increasing debt due to compounding interest.  The Ford Foundation has worked with me but I am concerned that I am never paying the entire interest so the balance keeps going up.  I am on Income Contingent Plan and they give me hardship forebearances where I pay minimum amounts that are affordable.  Unless my situation changes dramatically and I earn a lot more  money, will the Ford Foundation keep helping me out?  I pay every month.  It scares me that there are horror stories out there.

[Anonymous]

They will get their money- and the balance will continue to grow until you are able to pay towards the balance.

I don't know the Ford Foundation- you may need to take a broader look at you financial picture and see if you need to change jobs or move to another part of the country.

Part time job to increase income?

Good luck!!!!!

[Anonymous]

I feel for you.  I think the most you can do is continue to do what they ask of you and to be proactive, sending in extra when you can, and keeping them apprised of your situation.

In the meantime, you have to figure out how to increase your income.  I know it's a rotten position to be in, to be getting off the ground with your new career that hasn't quite lived up to the hype--monetarily, at least.  And maybe it's just a matter of giving it time.  But it may be a matter of moving to a different part of the country, or really taking a different tack within the career.

To some extent, you are protected by the fact that you've been in touch and continue to make payments.  They may want more money, but they don't want the payments to stop.  You may have to eventually be prepared to really show documentation about your finances to keep your payments within an affordable range.

Good luck.  I think you're doing the right thing so far.

[LynnInMN]

Op...your loan is with the William D Ford Direct Loan Program....not Foundation.  Your lender is the US  Department of Education.  Have you read their website??   Your ICR  payment plan is not a forebearance.

Income Contingent Repayment (ICR) Plan

The ICR Plan gives borrowers the flexibility to meet their obligations without causing them financial hardship. Monthly payments are based on borrowers’ annual Adjusted Gross Incomes (AGI), loan balance and family sizes. Income is obtained from the Internal Revenue Service (IRS) or from an Alternative Documentation of Income Form (discussed below) submitted by the borrowers.

To participate in the ICR Plan, borrowers (and if married, their spouse) must sign the Income Contingent Repayment Plan Consent to Disclosure of Tax Information Form. This authorizes the IRS to release borrowers' income information to the Department of Education to calculate monthly payments. Monthly payments are adjusted annually to reflect inflation, family size and income.

Monthly payment amounts for some borrowers may not be enough to cover the interest accruing on their loans. This situation is referred to as negative amortization. In such cases, the unpaid interest is capitalized and added to the principal balance once per year. The amount added to the principal balance will never exceed 10 percent of the original Direct Consolidation Loan amount. Once this capitalization limit has been reached, interest continues to accrue but is not capitalized. The capitalization limit does not apply to interest that accrues during deferment or forbearance.

The maximum repayment period for the ICR Plan is 25 years, less any time spent in ICR and the Standard repayment plan. Time spent in several other plans may not count toward the 25 year maximum. If the Direct Consolidation Loan is not repaid after 25 years, the unpaid portion is discharged. Borrowers must pay taxes on portions discharged after 25 years.

[Anonymous]

Thanks to everyone who replied....Lynn you are right it is the William D. Ford Direct Loan Program.  Thanks for clarifying everything....I thought that the ICR was a forebearance because I do not ever seem to pay the entire interest.   They have always been relatively easy and understanding to deal with.  It is scary to read some of the horror stories about education loans posted on the web.  Thanks for pointing out that a capitalization limit does exist...I will read up on the website.