An email I got this morning from the government regarding my student loans:
We recalculated your monthly payment for your Income-Based Repayment (IBR) plan. We used the income documentation […] to determine your monthly payment of $334.66 [….] If you do not recertify or you no longer have a partial financial hardship (PFH), your payment amount will be $641.77.
The power of Income-Based Repayment plans for student loans: I am literally paying half what my monthly payment would be if I didn’t have “income based” forbearance.
The downside of course is that it would take me well over twice the length of time to pay off my loans (given the payment size plus interest), but I am enrolled in Public Service Loan Forgiveness, which means if I am employed with a not-for-profit for another four years, to make ten years total, the balance of my loans, roughly $30K, will be forgiven.
Furthermore, I believe (qualifier: this may no longer be true, I haven’t checked recently) if you are enrolled in IBR and paying based on income, after 25 years your loans will be forgiven regardless of where you work. If you are unemployed, IBR can reduce your loan payments to zero even once you’ve used up your grace period. If you are long-term unemployed, that means in 25 years you will no longer carry student loan debt.
It’s 25 years of payments instead of 10, but it’s better than no help at all.
If you are in a low-earning job (I make just over $50K per year which in Chicago does not go far), IBR can help you keep your head above water and build savings by not charging you through the nose for your loan repayments. IBR is making it possible for me to afford to buy a home.
If you are employed with a charity, public school, private not-for-profit school, government agency, or other 501( c)(3) organization, you also qualify for Public Service Loan Forgiveness, which means after ten years of payments all of your qualifying loans will be forgiven.
A few years ago I wrote up how to apply for IBR and PSLF here. I just went through and updated all the links; it should be a good primer on the kinds of loans and jobs that the setup involves.
I’m on this too. It’s pretty damn helpful. The government’s student aid website explains things fairly clearly, actually:
Other things:
* Depending on various factors, like how long ago you took out your loans and it/how you reconsolidated them, you MAY be able to apply these repayment plans to your old Stafford/Perkins/PLUS loans.
* If you apply for IBR repayment within a certain amount of time after you graduate, you can get even better terms. You need to make sure you recertify promptly every year, or you will revert to the standard IBR terms.
* If you have been working in government/non-profit positions previous to applying for one of these repayment plans or Public Service Loan Forgiveness, it can still count–so long as you were paying on your loans while you were employed there.
from Tumblr http://ift.tt/1VSnINK