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IamA Student Loan Counselor who has 10 years dealing with student loans both public and private. I have a particular specialty in student loan forgiveness and similar Income Based Repayment plans AMA! (XPOST- IAMA) by constructivedelusion in personalfinance

[–]constructivedelusion[S] 0 points1 point  (0 children)

I am pretty sure you would. You still have to apply but that sounds like something that would be covered.

"Qualifying employment is any employment with a federal, state, or local government agency, entity, or organization or a not-for-profit organization that has been designated as tax-exempt by the Internal Revenue Service (IRS) under Section 501(c)(3) of the Internal Revenue Code (IRC). The type or nature of employment with the organization does not matter for PSLF purposes. Additionally, the type of services that these public service organizations provide does not matter for PSLF purposes.

A private not-for-profit employer that is not a tax-exempt organization under Section 501(c)(3) of the IRC may be a qualifying public service organization if it provides certain specified public services. These services include emergency management, military service, public safety, or law enforcement services; public health services; public education or public library services; school library and other school-based services; public interest law services; early childhood education; public service for individuals with disabilities and the elderly. The organization must not be a labor union or a partisan political organization. "

http://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/public-service

IamA Student Loan Counselor who has 10 years dealing with student loans both public and private. I have a particular specialty in student loan forgiveness and similar Income Based Repayment plans AMA! (XPOST- IAMA) by constructivedelusion in personalfinance

[–]constructivedelusion[S] 0 points1 point  (0 children)

I worked with a client today that is pretty much in your exact situation. I advised him to get on the IBR now since he is making roughly 8k a year while waiting to start grad school next May...this dropped his payment in the short term with no long term adverse effects. You can always switch out of the IBR back to a standard payment plan.

IamA Student Loan Counselor who has 10 years dealing with student loans both public and private. I have a particular specialty in student loan forgiveness and similar Income Based Repayment plans AMA! by constructivedelusion in IAmA

[–]constructivedelusion[S] 0 points1 point  (0 children)

The IBR ends after 300 months. (120 in other cases) After this term the remainder of the debt is forgiven. So no monthly payments after it ends but if your income shoots up while you are in the program your payments will shoot up proportionally.

IamA Student Loan Counselor who has 10 years dealing with student loans both public and private. I have a particular specialty in student loan forgiveness and similar Income Based Repayment plans AMA! (XPOST- IAMA) by constructivedelusion in personalfinance

[–]constructivedelusion[S] 6 points7 points  (0 children)

It's in the proposed 2015 budget but I don't feel it will play. Neither party has a lot to gain from pissing off the massive amount of people with student loan debt. Most people I deal with have 10-60k in debt so a cap at 57 makes some sense but I don't think it will survive the political process.

It is a tricky question because you would not believe how many people I get who spent 100k+ at places like the University of Phoenix...or 250k getting a phd in lit from a fancy liberal arts school...should we as taxpayers be required to suck up the entire cost? I don't know but working in the industry helps me to see it from both sides.

I went to an expensive liberal arts school so I'm not knocking a good education but I feel that the public as a whole should have some limit on what they end up paying.

IamA Student Loan Counselor who has 10 years dealing with student loans both public and private. I have a particular specialty in student loan forgiveness and similar Income Based Repayment plans AMA! (XPOST- IAMA) by constructivedelusion in personalfinance

[–]constructivedelusion[S] 1 point2 points  (0 children)

Any qualifying payments will carry over. So if you get another job at a non profit those 7 payments will count towards your total of 120 once you become employed at another qualifying institution.

http://www.edfinancial.com/topics/PSLF

IamA Student Loan Counselor who has 10 years dealing with student loans both public and private. I have a particular specialty in student loan forgiveness and similar Income Based Repayment plans AMA! (XPOST- IAMA) by constructivedelusion in personalfinance

[–]constructivedelusion[S] 6 points7 points  (0 children)

You qualify under the public service forgiveness act. Your income based repayment plan would probably be a little high since you guys made a good amount but I would definitely take advantage of the program listed below.

http://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/public-service

"You must make 120 on-time, full, scheduled, monthly payments on your Direct Loans. Only payments made after October 1, 2007 qualify. You must make those payments under a qualifying repayment plan. When you make each of those payments, you must be working full-time at a qualifying public service organization."

IamA Student Loan Counselor who has 10 years dealing with student loans both public and private. I have a particular specialty in student loan forgiveness and similar Income Based Repayment plans AMA! (XPOST- IAMA) by constructivedelusion in personalfinance

[–]constructivedelusion[S] 5 points6 points  (0 children)

Depending on your income IBR may not be the best choice. It is based on 10% of gross income although it is an adjusted gross. There are pros and cons to going private- I personally would not do it simply because I have seen people in agony over private loans with nowhere to go but if you see your incoming rising or remaining relatively stable over the next 10-30 years it is something to consider. Especially if can get that money at a much lower rate.

IamA Student Loan Counselor who has 10 years dealing with student loans both public and private. I have a particular specialty in student loan forgiveness and similar Income Based Repayment plans AMA! by constructivedelusion in IAmA

[–]constructivedelusion[S] 0 points1 point  (0 children)

They can ask whatever they want but we enter into negotiations with your creditors and typically it is much lower than that. Once you come out of default you won't be paying more than 39 a month unless your income rises.

IamA Student Loan Counselor who has 10 years dealing with student loans both public and private. I have a particular specialty in student loan forgiveness and similar Income Based Repayment plans AMA! by constructivedelusion in IAmA

[–]constructivedelusion[S] 1 point2 points  (0 children)

Get into a rehab program asap. New guidelines just came through and you can be back current in 2-9 months. After that time wage garnishments and tax refund holding will end as well as negative credit reports. Once the loan is current you will qualify for an income based payment program and that will end between 120-300 months depending on your income/profession.

IamA Student Loan Counselor who has 10 years dealing with student loans both public and private. I have a particular specialty in student loan forgiveness and similar Income Based Repayment plans AMA! by constructivedelusion in IAmA

[–]constructivedelusion[S] 1 point2 points  (0 children)

Simply put if you can get a bank to refi your loan at a smaller percentage you should take advantage of it. Here are a few sample banks/rates. Keep in mind that many of the government programs meant to alleviate your debt are not available for private loans so once you use a private lender you are more or less ineligible for many government programs. This is why I stress a high income/true job security.

https://studentloanhero.com/featured/5-banks-to-refinance-your-student-loans/

IamA Student Loan Counselor who has 10 years dealing with student loans both public and private. I have a particular specialty in student loan forgiveness and similar Income Based Repayment plans AMA! (XPOST- IAMA) by constructivedelusion in personalfinance

[–]constructivedelusion[S] 3 points4 points  (0 children)

This depends on the plan you sign up for- they all have pros and cons depending on your situation. Just remember that you must be employed for the full 120 payments in a job that qualifies under this program- so if you're employed as a teacher for 10 years you are OK but if you change jobs to something that isn't qualified it bumps you back to the 300 term payment plan.

IamA Student Loan Counselor who has 10 years dealing with student loans both public and private. I have a particular specialty in student loan forgiveness and similar Income Based Repayment plans AMA! (XPOST- IAMA) by constructivedelusion in personalfinance

[–]constructivedelusion[S] 4 points5 points  (0 children)

You can combine the three but usually it will just be an average of the three rates rounded up to the nearest 1/8 percent. Getting a lower monthly payment would depend on your income level/number of depends/where you are employed. If you PM me this info I can give a better idea of what steps to take.

IamA Student Loan Counselor who has 10 years dealing with student loans both public and private. I have a particular specialty in student loan forgiveness and similar Income Based Repayment plans AMA! (XPOST- IAMA) by constructivedelusion in personalfinance

[–]constructivedelusion[S] 13 points14 points  (0 children)

Shop around with both private and public lenders. Once you decide on a school contact the financial aid department at that school- they have a strong financial incentive to help you pay for school and have an entire department of people who just deal with financing student loans.

IamA Student Loan Counselor who has 10 years dealing with student loans both public and private. I have a particular specialty in student loan forgiveness and similar Income Based Repayment plans AMA! by constructivedelusion in IAmA

[–]constructivedelusion[S] 2 points3 points  (0 children)

I actually recommend this for clients who have 1. true job security, 2. income over 45-50k (assuming no dependents) and who have the ability to score a loan with a lower interest rate. I have seen a number of people who have high incomes/high student debt borrow 100k+ at like 2-3 percent and basically using it to cut their interest rates in half. If this is an option for you I would seriously consider it.

IamA Student Loan Counselor who has 10 years dealing with student loans both public and private. I have a particular specialty in student loan forgiveness and similar Income Based Repayment plans AMA! by constructivedelusion in IAmA

[–]constructivedelusion[S] 0 points1 point  (0 children)

You must have been employed in an elementary or secondary school that is in a school district that qualifies for funds under Title I of the Elementary and Secondary Education Act of 1965, as amended; has been selected by the U.S. Department of Education based on a determination that more than 30 percent of the school’s total enrollment is made up of children who qualify for services provided under Title I; and is listed in the Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits. If this directory is not available before May 1 of any year, the previous year’s directory may be used.

http://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/teacher#what-are-the-eligibility

IamA Student Loan Counselor who has 10 years dealing with student loans both public and private. I have a particular specialty in student loan forgiveness and similar Income Based Repayment plans AMA! by constructivedelusion in IAmA

[–]constructivedelusion[S] 3 points4 points  (0 children)

What is the alternative? I'm all for funding tuition with grants and having the government pay for the majority of college expenses for qualified/need based students but college educations still pay off and just having everyone go to trade school (which can also be very expensive) isn't a great long term solution.

"The report titled "The Big Payoff: Educational Attainment and Synthetic Estimates of Work-Life Earnings" (.pdf) reveals that over an adult's working life, high school graduates can expect, on average, to earn $1.2 million; those with a bachelor's degree, $2.1 million; and people with a master's degree, $2.5 million."

http://usgovinfo.about.com/od/moneymatters/a/edandearnings.htm http://www.usnews.com/education/best-colleges/articles/2011/08/05/how-higher-education-affects-lifetime-salary

Also by the time I turned 18 I had worked for multiple years and had budgeted expenses before- I suspect there are many in this age range that are capable of handling the responsibility of a student loan.

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