Educate me on these darn student loans and IBR - Mothering Forums

Forum Jump: 
 
Thread Tools
#1 of 6 Old 06-22-2012, 07:39 AM - Thread Starter
 
zebra15's Avatar
 
Join Date: Oct 2009
Location: State of Confusion
Posts: 4,693
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 8 Post(s)

Ok- so I'm not exactly uneducated about finances in general but I obviously do NOT have a clue about how my student loans work.

Last fall I finally swallowed my last little bit of pride and filled out the IBR forms and qualified for zero payments.  (this was huge for me because I am a firm believer in paying debts, I filed chapter 7 years ago and swore never to  fall behind or not pay again).  Anyway, off went the papers and I thought everything was fine. Somehow I thought I would get getting some sort of minimum payment credit toward my balance each month, but here it is 8 months later and I have a higher balance due to interest charges than I started with!

 

I just want to kick myself in the butt for doing this.  My loans are held with 'Nelnet'. I feel like the interest rate is sky high (over 6%), I have 4 loan accounts that total 17k and change.  (ya I know I know, all for a teaching certificate I'm not going to use but that point is moot right now).

 

What I need to know is HOW DOES IBR work?  Should there be some type of 'credit' toward the balance each month or does IBR just defer payments while interest continues to accrue on the accounts?  I'm not working yet but honestly I can find money to toss at this monster.

 

Has anyone successfully called NELNET and gotten answers?  The couple times I've tried to contact them, well its not been productive for anything but raising my blood pressure.

 

I feel like a fool. I have 15 years of banking experience, I know how the credit and lending markets work, I've worked in banking. This is WHAT I DO... I just don't know about student loans.   UGH  (I really want to cry)

 

Help


Mom to J and never-ending , 0/2014 items decluttered, 0/52 crafts crafts completed  crochetsmilie.gif homeschool.gif  reading.gif  modifiedartist.gif

Seeking zen in 2014.  Working on journaling and finding peace this year.  Spending my free time taking J to swimteam

zebra15 is online now  
#2 of 6 Old 06-22-2012, 08:00 AM
 
hildare's Avatar
 
Join Date: Jul 2009
Location: in-the-sticks-off-a-dirt-road, GA
Posts: 2,692
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

you might want to call and talk to them, but i do IBR.  i pay a minimum payment each month that doesn't affect the principal, i am only paying on interest at this point. 

however, legislation changed things somewhat so that there is a maximum number of years you must pay on it, i think it's 25 for you if you don't teach.  if you do work (i do) in education, then it drops to ten years.  so you will pay the minimum payment that doesn't really affect the amount you owe but you are off the hook after 10 or 25 years (25 if you don't work). 

i learned more by discussing the options with a loan officer though, and i can't vouch that what i am telling you is 100% correct, just my understanding of how the legal changes affect what you have to pay.


Is it getting lonely in the echo chamber yet?

hildare is offline  
#3 of 6 Old 06-22-2012, 08:08 AM
 
iowaorganic's Avatar
 
Join Date: May 2007
Location: Iowa
Posts: 3,292
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

IBR doesn't put a credit to your account- it is just like a yearly deferral.  Interest continues to accrue if you aren't making a payment.  Every year you will have to send in a tax return  to requalify- and if you start making more money- your payment may go up.  Thats how it works.  I am on it too- but my interest is 2%- so I am not worrying about it right now- just trying to build our business...


Iowaorganic- mama to DD (1/5/06), DS1 (4/9/07), DS2 (1/22/09), DS3 (12/10/10), DD2 (7/6/12) and a new kid due in early 2014

iowaorganic is offline  
#4 of 6 Old 06-22-2012, 10:55 AM
 
TiredX2's Avatar
 
Join Date: Jan 2002
Location: it appears to be a handbasket
Posts: 20,500
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

This might help:

 

http://studentaid.ed.gov/students/attachments/siteresources/IBR_QA_FINAL_20111207.pdf

 

Are your loans subsidized or unsubsidized?  If subsidized, it looks like the govt will pay the interest for up to three years (so the balance doesn't increase), otherwise the balance will increase because of the interest charged.

 

Good luck!


 

 

TiredX2 is offline  
#5 of 6 Old 06-22-2012, 01:15 PM - Thread Starter
 
zebra15's Avatar
 
Join Date: Oct 2009
Location: State of Confusion
Posts: 4,693
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 8 Post(s)

I can NOT stomach this for 25 years. I will be 63 years old when its all *over*.  It's been 8 months and I'm back in a state of panic.  I just need to start throwing some money at this monster and deal with the mess.  

 

I am in the process of rebuilding my life.  Some of you are probably following my personal saga LOL.

 

I'm waiting to hear about a potential job offer.  But if not this one, there will be another.

 

Tiredx2- 2 loans are subsidized, 2 are unsubsidized, how's that for keeping things fair? (they are with in 2k of each other as well)

 

Time to follow my own advice, create a spreadsheet of debts, interest rates and create a plan.


Mom to J and never-ending , 0/2014 items decluttered, 0/52 crafts crafts completed  crochetsmilie.gif homeschool.gif  reading.gif  modifiedartist.gif

Seeking zen in 2014.  Working on journaling and finding peace this year.  Spending my free time taking J to swimteam

zebra15 is online now  
#6 of 6 Old 06-22-2012, 04:45 PM
 
TiredX2's Avatar
 
Join Date: Jan 2002
Location: it appears to be a handbasket
Posts: 20,500
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Quote:
Originally Posted by zebra15 View Post

 

Tiredx2- 2 loans are subsidized, 2 are unsubsidized, how's that for keeping things fair? (they are with in 2k of each other as well)

 

Determine if what I found is correct (that the subsidized loans are not accruing interest) and then start throwing money at the highest interest rate loan of the unsubsidized.

 

Good luck!


 

 

TiredX2 is offline  
Reply

Tags
Finances

Quick Reply
Message:
Drag and Drop File Upload
Drag files here to attach!
Upload Progress: 0
Options

Register Now

In order to be able to post messages on the Mothering Forums forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.
User Name:
If you do not want to register, fill this field only and the name will be used as user name for your post.
Password
Please enter a password for your user account. Note that passwords are case-sensitive.
Password:
Confirm Password:
Email Address
Please enter a valid email address for yourself.
Email Address:

Log-in

Human Verification

In order to verify that you are a human and not a spam bot, please enter the answer into the following box below based on the instructions contained in the graphic.



User Tag List

Thread Tools
Show Printable Version Show Printable Version
Email this Page Email this Page


Forum Jump: 

Posting Rules  
You may post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are Off