New 10% pay back... Forum

[charlesjd]

This applies to all loans taken out after 2014 correct?

[Scarletlady]

Not sure. But, I attended an admitted students event last week and the financial aid officers seemed really excited about this option. They did not mention an effective date, so I assume it would apply to any loans from here on out.

[darknightbegins]

There are some other threads floating around here that go over this but there is some provision that doesn't go into affect until 2014, I just couldn't tell you what it is off the top of my head.

[mugrad06]

"The legislation will make it easier to pay back student loans, by reducing the share of income that a graduate must devote to loan payments and by accelerating loan forgiveness — but not right away. Those who take out new loans after July 1, 2014, will have to devote 10 percent of their income to payments, down from the current 15 percent, and those who keep up their payments will have their loans forgiven after 20 years, reduced from the current 25."

From the New York Times. I've been trying to find out if this helps any of us taking loans out right now, but so far nothing =(

[romothesavior]

"The legislation will make it easier to pay back student loans, by reducing the share of income that a graduate must devote to loan payments and by accelerating loan forgiveness — but not right away. Those who take out new loans after July 1, 2014, will have to devote 10 percent of their income to payments, down from the current 15 percent, and those who keep up their payments will have their loans forgiven after 20 years, reduced from the current 25."

From the New York Times. I've been trying to find out if this helps any of us taking loans out right now, but so far nothing =(

Yeah, why would this not take effect for a few years? Would be nice if we could get in on this as well.

[wreckem]

IBR stands for income based repayment. Its dropping from 15% to 10% of your discretionary income. Not from overall income.

IBR is to help
1. Those in poor paying jobs that have high amounts of student debt.
2. Those working in public service. Working in public service you debt is discharged in after 120 payments.

Apparently the 10% only effects loans taken out after July 2014.

[Jericwithers]

IBR stands for income based repayment. Its dropping from 15% to 10% of your discretionary income. Not from overall income.

IBR is to help
1. Those in poor paying jobs that have high amounts of student debt.
2. Those working in public service. Working in public service you debt is discharged in after 120 payments.

Apparently the 10% only effects loans taken out after July 2014.

So this bill only helps people who make less than a certain amount? What is this amount?

[wreckem]

IBR stands for income based repayment. Its dropping from 15% to 10% of your discretionary income. Not from overall income.

IBR is to help
1. Those in poor paying jobs that have high amounts of student debt.
2. Those working in public service. Working in public service you debt is discharged in after 120 payments.

Apparently the 10% only effects loans taken out after July 2014.

So this bill only helps people who make less than a certain amount? What is this amount?

This bill is just changing the program that started in July 2009. The 10% and 15% that is thrown around is the amount of your discretionary income that goes to loan payments. The more you make the higher your descretionary income is. Theres a certain point for everyone were IBR will cost you money. That certain point depends on how much you make and how big your loans are. The program is geared towards people with lower income and high student loan debt. I would never suggest IBR unless you work in public service for 10 years.

[Jericwithers]

IBR stands for income based repayment. Its dropping from 15% to 10% of your discretionary income. Not from overall income.

IBR is to help
1. Those in poor paying jobs that have high amounts of student debt.
2. Those working in public service. Working in public service you debt is discharged in after 120 payments.

Apparently the 10% only effects loans taken out after July 2014.

So this bill only helps people who make less than a certain amount? What is this amount?

This bill is just changing the program that started in July 2009. The 10% and 15% that is thrown around is the amount of your discretionary income that goes to loan payments. The more you make the higher your descretionary income is. Theres a certain point for everyone were IBR will cost you money. That certain point depends on how much you make and how big your loans are. The program is geared towards people with lower income and high student loan debt. I would never suggest IBR unless you work in public service for 10 years.

So if I take out $100k in stafford and grad+ loans and end up with an $80k corporate job I only have to pay 10% of my discretionary income? What if it is $130k? Same?

[PoliticalJunkie]

It's based on a debt to income ratio.

If i take out 200K for total student loans and end up with a job that pays be 100,000, I will probably be eligible for IBR bringing down payments from 2k+/month to just over 1k/month. (forgiven after 25 yrs in private work and 10 yrs in PI).

There is no "magic" number, but you best bet is to use some of the IBR calculators to see what kind of debt-income ration you're likely to have based on percentages, loan amounts, and projected salary (use the average for the school you attend/go to)

[darknightbegins]

It's based on a debt to income ratio.

If i take out 200K for total student loans and end up with a job that pays be 100,000, I will probably be eligible for IBR bringing down payments from 2k+/month to just over 1k/month. (forgiven after 25 yrs in private work and 10 yrs in PI).

There is no "magic" number, but you best bet is to use some of the IBR calculators to see what kind of debt-income ration you're likely to have based on percentages, loan amounts, and projected salary (use the average for the school you attend/go to)

Remember that your starting salary is going to be alot different (hopefully) than what you are making 10 years from that date. IBR is a bit of a risk, like anything else, unless you go directly into public interest work then after 10 years you go into private practice.