Damn Student Loans

from several months ago:

but forgiving all loans is also basically impossible. for one, we can't have taxpayers paying some harvard mba's loans. I would imagine the end-game will involve making it possible to discharge them via bankruptcy and some sort of bailout will be paired w/ that? but there will be no 'free ride', that's for sure.

― iatee, Thursday, September 15, 2011 6:03 PM (6 months ago) Bookmark Flag Post Permalink

i think that a large part of the student loan problem would be resolved by making all student loans fully dischargeable in bankruptcy (subject to a waiting period of however many years or income caps so that Harvard MBAs/white-shoe lawyers/Kim Kardashian's plastic surgeon don't immediately try to get rid of their burden).

Well, I would more or less qualify for ten year forgiveness under IBR for my current work situation. But it's sort of difficult then how to think "tactically" about paying my loans. I also see a lot of conflicting opinions on whether or not the forgiven amount is subject to tax - seems like it should be, but apparently not?

i don't think that the amount forgiven under IBR is taxable (though i don't have a citation for that) mainly b/c if it was there would've been a pretty big stink about it.

sweeet

I have a citation for it somewhere...

http://www.finaid.org/loans/forgivenesstaxability.phtml

Some loan forgiveness programs are taxable and some are not. Under current law, the amount forgiven generally represents taxable income for income tax purposes in the year it is written off. There are, however, a few exceptions. Generally, student loan forgiveness is excluded from income if the forgiveness is contingent upon the student working for a specific number of years in certain professions.

Public service loan forgiveness, teacher loan forgiveness, law school loan repayment assistance programs and the National Health Service Corps Loan Repayment Program are not taxable. Loan discharges for closed schools, false certification, unpaid refunds, and death and disability are considered taxable income. The forgiveness of the remaining balance under income-contingent repayment and income-based repayment after 25 years in repayment is considered taxable income.

so IBR IS taxable income then ... unless you are eligible for one of the loan forgiveness programs that explicitly states that the amount forgiven is non-taxable.

i am also on the IBR plan, about 2.5 years down, 7.5 more to go. after all these months of payments, i still haven't even cut into the principle, so if i don't follow through to 10 years i'm screwed.

/indentured public servant

so IBR IS taxable income then ... unless you are eligible for one of the loan forgiveness programs that explicitly states that the amount forgiven is non-taxable.

Right, although I believe I will qualify for PSLF like ZS. Just getting my certification now.

Do you just pay the minimum, Z S? Good luck to you! - 1/4 of the way there is pretty good going, IMO. You'll hopefully be one of the first over the finish line!

I just pay the minimum, yep. which is still like $450 a month. what's sad is, before i got on the IBR plan, i was on another repayment plan for several months that was more like $600 a month, and i STILL wasn't cutting into the principle at all!

I will be paying more than twice what you pay, bro!

oh man, so sorry! that suuuuucks!

I'm actually weirdly okay with it. It's because my IBR is calculated off of both my wife and my income. But because my minimums are so big AND I hopefully qualify for PSLF, I feel okay about the fact that I am probably paying down interest faster than I would if I filed single. I also get a pretty big tax refund that way so would usually just pay it down on my loans. And I just erased all my other debt so I can focus on this.

Let's just hope she's right, haha!:

http://askheatherjarvis.com/blog/PSLF_is_secure

on the "forgive student loans" movement thing, my gut reaction is that if the government is going to spend hundreds of billions of additional dollars to help people out, it seems kind of...wrong...to direct that money toward a bunch of college graduates rather than people stuck in a cycle of poverty. obviously i understand that so many of us are over our heads in student loan debt, and that if the debt was forgiven a bunch of people would have extra hundreds of dollars each month to consume products. and of course, i realize that the same crappy argument could be made against any sort of financial stimulus directed toward the middle class. but still.

which is why the bailout is prob gonna be 'letting people go bankrupt'

Yeah on some level I am, well, okay I will do my best to pay these within reason. I def. see it as my responsibility and I did sign up for it after all.

I just don't quite think student loans should even HAVE interest, or significant interest I should say.

(xp)

well that's just another subsidy. 'no interest' is no different from 'here here's $500'

the bigger problem is that even after people in the worst situations can go bankrupt, higher ed isn't getting any cheaper

I got a severance payment last year that was taxed at close to 40% but also bumped my income up enough that I think I'm going to be dq'd from my ibr plan, despite the fact that I don't currently earn as much as last year's return would indicate. Those paymens are going to make my life much more difficult :(

tehresa, Do you have to file for IBR from your tax returns? I did mine using an "alternative documentation of income" that reflects my current income:

http://www.usafunds.org/lenders/Lender%20Forms/IBRAltIncomeDocumentation.pdf

ooh thanks. they had asked for my most recent return but i think i can use that form.

Guys I need to reconsolidate (under my Federal Direct loan) but I don't know which repayment plan to choose. Anyone have pros/cons w/ the Income-Based Repayment and/or Income Contingent Repayment? They seem more appealing than the standard fixed-rate plan but I'm worried there's some aspect of this that I'm not considering.

it's insane. my first bill came and said that in 6 days "$583" was due - my min payment!!!!! I called and told them in NO WAY could I pay that much a month let alone in 6 days. I logged onto myedu and did a income based payment and it said I could afford over $900 a month - who designed this freaking algorithm? As it is, living alone in So Cal is paycheck to paycheck - how is it they think I'm sitting on $900 each month?!! I had no choice
but to go with the increase every 2 years plan for 25 years. I'll pay TWICE as I borrowed and the best part? I'll be paying $675/month ages 63-65! let's hope my social security can cover it!!! For the next two years I'm at $192/month.

it's terrible. I couldn't afford to go to graduate even if I wanted to :( So much for a new(er) car any time soon. let's hope work is always just 7 miles away. such a flippin' bummer :(

http://online.wsj.com/article/SB10001424052702304818404577350030559887086.html

Between the ages of 18 and 22, Jodi Romine took out $74,000 in student loans to help finance her business-management degree at Kent State University in Ohio.

jesus christ

I didn't think you could borrow that much for a BA

For Stevie:

http://askheatherjarvis.com/forums/viewthread/215/

But I can summarize - you pretty much want IBR

Jen IBR is supposed to be 10-15% of your income. That's the point of INCOME-based repayment. Are you using the calculator right?

http://askheatherjarvis.com/forums/viewthread/2744/#961

This one?
http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRCalc.jsp

I'm using the calculator at the myedaccount they ask my for my adjusted gross income monthly, gross monthly, martial status and family size. I'm single, never married, no kids, and decently above the median income for the US. It can be "up to 25%" and that's what I get socked with. I can't seem to find what "middle class" income is. According to Wiki I'm above "lower middle class". So with no mortgage, no family, they think it's more like 25% of my take-home that is available for paying this off. We SINKs really get the shaft. tax wise, too! Sadly, my rent is 1/2 of my take-home. Not rent and utilities, just rent where I think the rest of the country goes for like 1/3 of take home for rent and utilities. and i have low rent for where I live! still HALF of what I make.

anyways. I'm on the pay double over 25 years plan. and $192 for the next 2 years. I borrowed the max allowed 48k (maybe it was 46K) for a BA. so nope. can't even think about graduate school unless an employer is picking up that tab.

apparently I could get a $10/month plan for my $6000 loan

Haha my monthly payments are almost a quarter of your entire loan

Jen it sounds like you make too much money

and pay too much rent

I recommend you actually call the Fed and speak to them, they are surprisingly helpful. Although so few people-accountants included-seem to properly understand this shit. I guess there's a niche for someone there.

I did call them and this was the only way to get my payments to what I could afford now: $200 month (I pay another $75 for an non-fed student loan so $275/month total). With this plan I will pay 110K for 60K borrowed over 25 years. I'm very lucky to earn enough to pay this. It seems INSANE that I will end up paying double for my BA. Pretty insane a BA costs so much but I'm not trying to buck the system. Just like a family of 4 can't live on 25k. The assumption even 10-25% of your take home is available for one single debt is just nuts!

Not anymore, lol =/ I think that assumption has actually become kind of normal now that student loans are starting to look a bit more like mortgages

http://www.lepoissonrouge.com/lpr_events/peoples-bailout/

ATTN student loan experts:

I am repaying abt $12,000 of consolidated federal student loans under the Income Based Repayment plan, which I was eligible for when I was experiencing "partial financial hardship"

however due to new job I am no longer financially challenged. It's time for me to renew my IBR paperwork, and idk whether or not to keep IBRing it or go back to the standard repayment plan. Is IBR like this super special club that you never want to leave once yr in it? Are there any distinct advantages or disadvantages of going back to standard repayment?

When is the US going to get to grips with direct debit?
― Ed (dali), Wednesday, April 30, 2003 9:41 AM (10 years ago) Bookmark Flag Post Permalink

lol

The ILX-shamefully-ignored INTERCEPT continuing to kick all kinds of varied news type ass, right down to the fab lead photo - check out those t shirts ILM-ers:

https://firstlook.org/theintercept/2015/05/04/bankruptcy-filing-shows-corinthian-colleges-secretly-funded-d-c-think-tanks-dark-money-election-efforts/

this will end well

https://news.vice.com/story/betsy-devos-will-let-one-company-handle-all-federal-student-loans

sounds good - monopolies laways work out well

Acting like there was accountability among the servicing companies because of competition seems sorta silly. These firms are basically like defense contractors or municipal waste companies or charter school operators. Replacing a cartel with a monopoly may not make much of a difference at all

I hope they will service me well

only the best people :)

https://www.insidehighered.com/quicktakes/2017/08/30/report-education-department-hires-enforcement-chief

yes, finally -- there is way too much opportunity in america

https://www.cnbc.com/2018/02/12/trumps-budget-would-end-student-loan-forgiveness-program.html

Why is that not a bigger story?

possibly because few people have successfully completed the PSLF program. it requires 10 years of qualifying monthly payments, and it wasn't a program until 2007, so only the very first wave of people who qualified for the program at the very beginning and then didn't miss a single payment in 10 years have made it through. speaking of...

i am also on the IBR plan, about 2.5 years down, 7.5 more to go. after all these months of payments, i still haven't even cut into the principle, so if i don't follow through to 10 years i'm screwed.

/indentured public servant

― 1986 tallest hair contest (Z S), Wednesday, April 4, 2012 1:38 PM (five years ago)

i'm sure i told my pathetic PSLF story on another thread, but i got completely screwed/screwed myself. Department of Education didn't come up with a process for PSLF participants to monitor their progress until around 2014 or so. when they did, i submitted my work history, expecting to be told that i had successfully completed about 5 of the 10 years worth of monthly payments, since i was in a qualifying job and a qualifying repayment program (IBR), and i had paid my student loans on time every month for the 5 years i'd been with the govt at the time. instead, after several months i received a response stating that i had only successfully completed around 2.5 of the 5 years. for almost a year straight, it turns out, i was autopaying a tiny amount less than the full monthly payment (for example, if i should have paid $500 in a month, my autopay would pay about $490). i have no idea why that happened. i signed up for autopay and to pay the full amount every month, and somehow that happened. as a result, NONE of those payments counted toward my 10 years. in addition to that, some early payments that i made were apparently not in a qualifying payment plan, so those didn't count either. anyway, long story short, after 5 years in PSLF and a huge portion of each paycheck going to the monthly payment, only half of them counted, meaning i would need to work 12.5 years instead of 10 years to get my loans forgiven.