Reduce Student Loan Payment after July 1, 2009 YMMV

[snowbunnyy]

Is this program a better option than being on a deferment with your loans? I just entered repayment on my loans but was granted deferment for up to one year because I haven't found a job. My interest is at 6.5 and continues to accumulate. I owe over 40k right now!

[zodiac711]

While I think the concept has good intentions, it's yet *another* bail-out that *I* pay for, yet don't reap any benefit from.

Too bad there are only two viable government parties.

Thanks for the link to the calculator Op -- rep'd

[tightywhitey]

Quote from CHUMPchang3 : LOL! but then they'll go after any dependents/family members to collect their loans...slick idea though!

Nope, if you have a federal stafford they are nice enough to forgive it when you die.

[noswttea4u]

So none of this would apply to a private student loan, like through Citi?

[wedge]

Quote from noswttea4u : So none of this would apply to a private student loan, like through Citi?

That is correct.

[sukh]

I was so excited to hear about this I was about to walk over the financial aid office and request the (additional) $8,000 I could get in loans right now! but then realized that I would probably make money in the future so this would do me no good.

unless.....I take it out and keep it on the side, e.g. Baby's Mama insurance. Unwanted Kid + student loans = Win!

Might be good for the housewife/househusband whose income will stay low. Or people who will start families young! Great information I will pass it along.

[Parafly9]

I misunderstood when reading this at first.

My wife is a teacher for 4 years, so in six years i'll have to see if we can save some money haha

[hermdigi]

so if i am single and make 60k and have 45k in loans i imagine i do not qualify right?

i do work for the govt in public service type stuff. IT field

[mprice12]

Quote from tightywhitey : Nope, if you have a federal stafford they are nice enough to forgive it when you die.

Exactly.. thus my scheme.. I may run out of degrees I can get at some point tho.. lol

And as far as paying for this.. At 6.8% interest combined on top of the 3% many lenders take off the top for fees..they will make their money back for the original loan amount just wont get the 200-300% return on investment that they usually make on these loans. Most loans are paid up principle wise in 10yrs.. then the last 20 is interest (But it isn't figured that way.)

Many students in health professions work for 3+ yrs serving the low SES for little or no pay as part of training. I will have put in 5yrs plus for almost free at various public institutions by the time I am license eligible in FL. Medicaid and Medicare reimburse little compared to standard rates and minimally cover expenses. So do I feel bad if they pay off my loans in 25yrs?... not really as I've conservatively put in a good $200K of free labor.

Also wish I could get that kind of interest rate return on my investments that's guaranteed. Best any bank gives on average is 2-3% on a CD then they loan out the money on student loans making 3% up front which pays for interest and then 6.8% is pure profit without risk. What a scam!

[roseyposey]

FYI for those that are married and BOTH spouses have debt, this is why your estimate is coming back so high:

If you are married, you should be aware that both your spouse’s income and your own income are considered to determine the resources you have available to make payments on your federal student loan(s). This is true whether or not your spouse is also making student loan payments. Therefore, under current IBR regulations, when two married individuals both have student loan debt and file taxes jointly, they could be expected to pay up to double the monthly loan payment of two unmarried borrowers in otherwise identical situations.

However, the U.S. Department of Education has agreed to revisit this rule and factor in both spouses' debts when calculating one applicant's IBR payments, but that change would not go into effect until as late as July 2010. In the meantime, the current rules will apply. Please sign up for our mailing list so we can keep you updated on these and other changes. More information is available here.


Which means that the current policy counts the total household income to calculate against each spouse's debt individually. As opposed to counting total debt against total income or individual debt against individual income.

[tightywhitey]

Quote from Parafly9 : I misunderstood when reading this at first. My wife is a teacher for 4 years, so in six years i'll have to see if we can save some money haha

If she's in a low income district, or teaches math, science, or special ed, she can get $5000-$17,500 [ed.gov] off of her loans forgiven after her 5th year of teaching. As far as I can tell, that program has not been cancelled. I will be fuming mad if the new public service thing supercedes this as I am set to recieve my $5000 (+ another $5000 matched by the state of IL) after next year which for me, is a much better deal than waiting through 10 years of payments to get the last $1000-$2000 forgiven.

Thanks OP for posting info on IBR. Even though it only saves me a whopping $14 a month, since it doesn't really extend my repayment terms (holla for loan forgiveness), I'll gladly accept the discount!

[janel_marie]

I'm sorry I don't get this, can someone help?

My hubby just graduated end of feb so we'll begin repaying in I think Sept/Oct? Anyways. He's got 40k in student loans. We make 46,000 and we have 2 kids, so 4 in household. Could someone help me figure this out? I don't understand all the abbreviations and such of this yet.

[mprice12]

Quote from janel_marie : I'm sorry I don't get this, can someone help? My hubby just graduated end of feb so we'll begin repaying in I think Sept/Oct? Anyways. He's got 40k in student loans. We make 46,000 and we have 2 kids, so 4 in household. Could someone help me figure this out? I don't understand all the abbreviations and such of this yet.

Check out the calculator http://www.ibrinfo.org/calculator.php.

If you look like you will save more on this than on other methods then use it. Most loan company servicers have repayment calculators on their sites for other loan programs/repayment plans. If you still don't understand call your loan provider. You may want to consider consolidation (take to your provider) and strongly consider not consolidating yours with you husbands just incase you get divorced it makes things messy.

[irrelevant4]

does a substitute teacher for a public school district count as a 'public service' eligible job? it says that employees of public schools or colleges are included and a substitute teacher is an employee of a public school or college.


in general, this seems tempting to do, so long as i stay in a relatively low-paying job and single for the next 10 years, which is appealing in itself, but if you end up changing situations, youve got to make up for all the interest that accumulated while you were making the super-low/$0 monthly payments.

[tools86]

Dont forget the IRS. Loan forgivness is income to the taxpayer.