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Student loan repayment relief? IBR

post #1 of 50
Thread Starter 
My hubby and I have federal student loans that are ages old and we made the terrible mistake of defer and forbear (sp?) forever....so now our loans have doubled and more.....I wish I had know then what I know now.....but anyway I started paying on mine in May of 08.....it was $275 but after a couple months I switched to graduated pmts where I started lower so my pmts were adjusted to about $225.....which I can more or less afford...now my husbands are almost triple mine and he is coming off an 'excessive student loan forbearance"...his pmts would be like 700 a month ....he has one year left of this special forbereance and then nothing, zilch left so he'd have to pay.......well I decided we needed to go ahead and pay now and 'save' that yr left of forbereance for a just in case ...otherwise if we used it now (I had thought it since I could put a big dent in our cc debt and in 1 yr it would have been easier to pay off the loan) we would be left with nothing of safety net in case of a job loss.......
Anyway so I am searching Sallie Mae (his loans are consolidated thru Salle Mae, they are FFELP loans) and I clicked on 'important info'....and I saw a new repayment plan for July of 09 where borrowers (federal loans) would qualify based on income , it is called Income Based Repayment.......if I am reading it right we may have lower pmts based on fml size, poverty line...I am probably doing this wrong but this could lower his pmts to a much much more affordable amounts.....I am thrilled but thinking maybe I am wrong so don't want to get my hopes up but anyway do you guys with student loans know anything about it? It is supposed to allow to pay based on income up to 25 yrs and then if you still owed it would be 'forgiven'.....anyone else thinking of doing this?
post #2 of 50
i didnt know anything about this, so i looked it up (we have $54K in student loan debt!)
this is from the FAFSA website:
http://www.nasfaa.org/publications/2...ons102207.html

and this is a calculator to help you figure what your payments would be, (its rather confusing)
http://www.finaid.org/calculators/ibr.phtml#help14

i'm looking into this more, and will post anything i find.

(anyone know what qualifies as "public service" ?) DH is a nurse, does that count? it says you can have portions of your loan debt forgiven if you work in public service
post #3 of 50
Thread Starter 
there are lots of info on both the IBR (25 yrs forgiveness) and the public service 10 yr forgiveness plan.....I have been reading a lot and here is some of the easier info
http://www.ibrinfo.org/what.vp.html
post #4 of 50
Quote:
Originally Posted by cravenab00 View Post
(anyone know what qualifies as "public service" ?) DH is a nurse, does that count? it says you can have portions of your loan debt forgiven if you work in public service
I don't know anything about student loans, but clicked the link because my sister has some. I can, however, answer this question.

A public servant is someone that works for a government agency like a police officer, fireman, public defender, town manager, etc. Unless your dh is a nurse in something like a federal prison and employed by a government agency, then he wouldn't be a civil servant. My father was a draftsman at a naval base and he was considered a public/civil servant.
post #5 of 50
WOW!!! Thanks for posting this! I am calling tomorrow! My husband and I are teachers in a public school and have a combined 70K of debt! We are on a 20 year plan and pay $575/month...about 10% of our take home.


Anyway, FWIW, I did see that "public health" was considered a public service position...would that be considered nursing?
post #6 of 50
Well, bummer. Unfortunately I can't qualify even though I'm a public health nurse working for the county. If you make too much to qualify for lower payments under income contingent/income based repayment and you are using extended repayment, you don't qualify. They don't understand some of us have lots of bills & really can't afford the high student loan payments even though our income is higher...

From the direct loan financial aid site:
"The law allows only public servants with salaries low enough to
qualify for income contingent or income-based repayment plans to
be eligible for loan forgiveness of remaining debt over and above
the amount that can be paid off in 10 years. If you do not qualify for
either of these plans at some point during your repayment
schedule, you will not qualify for forgiveness."
post #7 of 50
Oh my, this could really help us out!

I've had student loan debt for 5 years now...and never made one payment because I've been low income. So I've defered a lot. I haven't added on too much interest (only did forebearance a few times) and my loans are about 33-35k.

I used the little calculator and entered some different numbers from the jobs that I've applied to (currently un-under employed) and I would qualify even with the well-paying job that I'm really crossing my fingers for. Plus, I'll be working in public service either way. This is a godsend.
post #8 of 50
Has anyone contacted the direct loan people and talked to them about this?
dh has a lot of loans and is a teacher. this would help so much!
post #9 of 50
Thank you so much for sharing these links! I've never heard of this but I think we qualify (will have to do some more in-depth research).
post #10 of 50
Dh called and talked to the direct loan people about this. we will be consolidating through them soon so we can qualify for the new program in July!
post #11 of 50
This is great! Too bad DH's biggest loan is through his dad. Well, it isn't the biggest loan but it's the one with the biggest payment.
post #12 of 50
Oh, my gosh! Thank you sososo much for posting this. I just made some phone calls, and my student loan payments will go from $160 to $15 in July. SAHMing just got a little easier.

And when I go back to work, chances are it will be in public service.

What great news. I don't mind paying a lot more when I am working, but I feel like a heel having DH pay for my loans when they were for my education, not his. He says we're a team and it doesn't matter, but I still feel bad. What great news.
post #13 of 50
I understand times are hard, but I pay $415 a month for my loans, and it kinda irks me when people are not having to pay back their loans. It seems most are low income who have 5 kids and can't afford it.
I would love to have kids and a nice house, but I'm choosing to get my debt under control before I add more. Why does everyone need a helping hand all the time?
This is not directed at anyone specific, it's just frustrating thinking about a lot of people abusing the system.
post #14 of 50
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post #15 of 50
Quote:
Originally Posted by Eric View Post
I understand times are hard, but I pay $415 a month for my loans, and it kinda irks me when people are not having to pay back their loans. It seems most are low income who have 5 kids and can't afford it.
I would love to have kids and a nice house, but I'm choosing to get my debt under control before I add more. Why does everyone need a helping hand all the time?
This is not directed at anyone specific, it's just frustrating thinking about a lot of people abusing the system.

Eric, based on your user name, I can only presume you are a man- and if that's the case, I hate to point out the obvious, but you are speaking from a position of privilege in that men CAN wait to have children. A lot of women cannot wait without risking their health, infertility, or having to spend $$$ on ART or adoption fees. And if you are a woman, I most sincerely hope that you do not wait until it's too late- money's just money, but family is a whole lot more important, at least to me.

Another thing to consider is that if people are making 150% of the poverty level, especially if they are in a higher COL area, there's a *very* good chance that they are just defaulting on their loans because they have to eat and keep a roof over their heads. That is not abusing the system, that is the reality of the economy we are all living in.

If you use the IBR calculator, and your payment is still $415 per month, my guess is that you probably can afford it. If the IBR calculator reveals something different, I would hope that you utilize this new system to your advantage, too- that's what it's there for.

This is all based on income, and everyone's formula is exactly the same- 15% of whatever you make over 150% of the federal poverty level. I would call that fair, not abusive.

Not everyone needs a helping hand all the time. I full intend to go back to work once my little ones are no longer so little. Frankly, it wouldn't make economic sense for me to go back to work- between childcare, an increased tax rate, and transportation I'd net, at best, a few hundred a month at best, and that's if I worked full time making as least as much as my husband. Not only that, I would have to formula feed my newborn, which would result in higher health care costs for all of us.

So I need a helping hand for the time being. Some people need a helping hand for a longer time frame. It's okay- I'll bet someday, you will, too. And I will be happy to see that you, and anyone and everyone, gets the help they need.

And about those people who have "more kids than they can afford"- who decides that? Would you prefer that people not have children until they've passed a means test? That children become only a privilege of the wealthy? Or would you prefer that we become a country with an even higher abortion rate? Personally, I think our constitution is written in such a way that indicates the government ought to butt out of such personal decisions.

I personally think that this legislation was passed because, finally, the government realized what a crisis is looming in public sector jobs. Just for example, teachers- in my state, public school teachers start out at $25,000 per year and don't get significant raises until they've gone on and gotten a master's degree. They can easily be $50,000 in debt by the time that's all said and done, especially considering that a teaching bachelor's (again, in my state) takes about 5.5 years to complete because of all the additional requirements. A few years ago, the new financial aid counseling rule of thumb became, "Don't accumulate more debt in college than is equal to your first year salary". That's what they're telling college freshmen now. So: based on that advice, who in their right mind will become a teacher now?

Unless we drastically raise the salaries of public servants, this is a decision that had to made for the sake of our economy and a well functioning government.

I am not trying to be snarky or nasty here. I am trying to point out that there a legitimate social and economic reasons to implement IBR. It's not a hand out, it's common sense. And again, if it applies to you, use it. That's why it's there.

Very sincerely, FKR
post #16 of 50
Quote:
Originally Posted by FormerlyKnownAs View Post
Eric, based on your user name, I can only presume you are a man- and if that's the case, I hate to point out the obvious, but you are speaking from a position of privilege in that men CAN wait to have children. A lot of women cannot wait without risking their health, infertility, or having to spend $$$ on ART or adoption fees. And if you are a woman, I most sincerely hope that you do not wait until it's too late- money's just money, but family is a whole lot more important, at least to me.

Another thing to consider is that if people are making 150% of the poverty level, especially if they are in a higher COL area, there's a *very* good chance that they are just defaulting on their loans because they have to eat and keep a roof over their heads. That is not abusing the system, that is the reality of the economy we are all living in.

If you use the IBR calculator, and your payment is still $415 per month, my guess is that you probably can afford it. If the IBR calculator reveals something different, I would hope that you utilize this new system to your advantage, too- that's what it's there for.

This is all based on income, and everyone's formula is exactly the same- 15% of whatever you make over 150% of the federal poverty level. I would call that fair, not abusive.

Not everyone needs a helping hand all the time. I full intend to go back to work once my little ones are no longer so little. Frankly, it wouldn't make economic sense for me to go back to work- between childcare, an increased tax rate, and transportation I'd net, at best, a few hundred a month at best, and that's if I worked full time making as least as much as my husband. Not only that, I would have to formula feed my newborn, which would result in higher health care costs for all of us.

So I need a helping hand for the time being. Some people need a helping hand for a longer time frame. It's okay- I'll bet someday, you will, too. And I will be happy to see that you, and anyone and everyone, gets the help they need.

And about those people who have "more kids than they can afford"- who decides that? Would you prefer that people not have children until they've passed a means test? That children become only a privilege of the wealthy? Or would you prefer that we become a country with an even higher abortion rate? Personally, I think our constitution is written in such a way that indicates the government ought to butt out of such personal decisions.

I personally think that this legislation was passed because, finally, the government realized what a crisis is looming in public sector jobs. Just for example, teachers- in my state, public school teachers start out at $25,000 per year and don't get significant raises until they've gone on and gotten a master's degree. They can easily be $50,000 in debt by the time that's all said and done, especially considering that a teaching bachelor's (again, in my state) takes about 5.5 years to complete because of all the additional requirements. A few years ago, the new financial aid counseling rule of thumb became, "Don't accumulate more debt in college than is equal to your first year salary". That's what they're telling college freshmen now. So: based on that advice, who in their right mind will become a teacher now?

Unless we drastically raise the salaries of public servants, this is a decision that had to made for the sake of our economy and a well functioning government.

I am not trying to be snarky or nasty here. I am trying to point out that there a legitimate social and economic reasons to implement IBR. It's not a hand out, it's common sense. And again, if it applies to you, use it. That's why it's there.

Very sincerely, FKR
I'm not sure how to use multiple quotes so I'll try and make this easy enough to read.

1. Thank you for your response. I appreciate feedback.

2. I am a male. I've been in a serious relationship for over 2 years, with marriage and children looming in the next few years. I would be married now, but we have decided that we will enter marriage and parenthood with no debt, no exceptions.

3. I understand your situation. That's perfectly fine. This is a general vent at people I read about on here, and see in the grocery store line, with 5 or 6 kids, food stamps, and then loading up a new Escalade. Something is wrong with that picture. My coworker is a stand up example of the people who abuse the system, and we work for the government. She takes pride in it.

4. As far as myself needing a handout, I can't see that in the future. I fully intend to not sound cocky, but my job is quite secure, and my finances are thankfully doable by choice. I have had rough patches in college, but I've never asked for a handout.

5. My dad raised my brother and I, on a salary less than 40k a year. He never used a dime from the government. He made it work. He's my inspiration to make it work. I guess I just don't accept excuses from my SO and myself. When we have financial issues we make it work. We don't ask for handouts from family or the government.

6. Regarding the people having more kids than they can afford. This is the issue that kills me. BE RESPONSIBLE! Don't have kids if you have to rely on some one else to help you out! That's common sense! And yes I do think some people should not have kids.

Once again, this was blindly directed at people who can't provide for themselves, who think it's ok to rely on someone else to take care of them, and take pride in having kids when they can't support them. Occasional help is great, and I'm perfectly ok with that. The government programs are just so easily taken advantage of, and I wonder where people's pride has gone sometimes.
post #17 of 50
This was possibly not the right thread to post my vent in. Sorry to hijack your thread. Maybe I'll post my own vent thread.
post #18 of 50
It's all good. I like feedback, too.

It's okay to disagree.

I admire that you and your partner have decided to do the delayed gratification thing.

It's sounds like you are very responsible and try hard to make good choices, which is great. Unfortunately, not all of us are equipped with the gifts and resources that it often takes to make good choices.
post #19 of 50
I am currently a fulltime student and single mother that is living off of student aid. Before becoming pregnant I was a bartender four nights a week and made $500-700 in tips plus a paycheck for a total of about $3600 a month. I CHOSE that it would be better for my child to have a mom that is a professional and who doesn't work nights just to have nice objects. I used to live in a nice condo in Capitol Hill that was $2000 for rent and spend money of frivoulous things. Gee I guess I could aford to be a parent before I became one LOL.
I don't mind being on student aid, heck I don't mind being on government aid. Since I am a full time student I qualify for foodstamps. I don't mind these things because of several reasons. First of all there is nothing more important than quality time spent with my child, that is priceless but doesn't cost anything. Second, I have paid taxes for over 10 years, I have donated money to charity, I have volunteered at food banks and shelters etc. Third I will be a nurse by the time my daughter starts elementary school, she will be able to tell people what her mommy does and be proud.
I was under the impression that MDC was about attachment parenting, not discrimination against parents for their social class!
post #20 of 50
Quote:
Originally Posted by Eric View Post

3. I understand your situation. That's perfectly fine. This is a general vent at people I read about on here, and see in the grocery store line, with 5 or 6 kids, food stamps, and then loading up a new Escalade. Something is wrong with that picture. My coworker is a stand up example of the people who abuse the system, and we work for the government. She takes pride in it.

4. As far as myself needing a handout, I can't see that in the future. I fully intend to not sound cocky, but my job is quite secure, and my finances are thankfully doable by choice. I have had rough patches in college, but I've never asked for a handout.

5. My dad raised my brother and I, on a salary less than 40k a year. He never used a dime from the government. He made it work. He's my inspiration to make it work. I guess I just don't accept excuses from my SO and myself. When we have financial issues we make it work. We don't ask for handouts from family or the government.
One shouldn't generalize based on the experience they have with a few people. BTW, how do you know that Escalade the hypothetical family is loading up really belongs to them? Maybe they borrowed a friend's car. Judging is easy. Understanding takes more.

I'm glad you don't see a financial crisis in your future. I pray you never have to because it's not a fun place to be. I doubt most of us saw financial crisis in our future. I didn't. I never thought I'd be where I am. Believe it or not, there are circumstances out of one's control that can lead to financial instability. There are people out there who had 5 kids while they were doing just fine financially. Then tragedy happens, there is a VERY unexpected job loss or a death. Stuff happens and we can't point fingers and deem people as irresponsible just because they ask for help. There are certainly people out there who abuse the system, there is no denying that. Those are the people that get the most press, the ones we focus our frustrations on. However, those people are most likely the exception to the rule. I firmly believe that that majority of folks who use government aid do so as a last resort, likely with some embarassment and shame, and work hard to get off it as soon as possible.

As for job security...my neighbor is an emergency room nurse, very skilled, and has been at her job for 12 years. They are cutting her hours in half and then bringing in another part-timer, fresh out of college, that they can pay at a lower wage. That sort of thing is happening more often right now and in MANY professions. It's alarming how much it is happening in healthcare as most people assume that healthcare is one of the most stable inductries out there. But, as many Americans are unable to afford adequate healthcare and cut out their trips to doctors, hospitals, clinics, pharmacies...the need for support staff will dwindle. My husband works at a very large retailer and their applications for last month were TRIPLE qhat they were the previous month. And they are getting people who are WAY "overqualified" to work in retail.

It's easy to say, "Oh, I'll never be in that situation." It's easy to put the blame on others and assume everyone is just being greedy and asking for handouts. There, but for the Grace of God...
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