Loan Forgiveness After 20 Years Even if not in PI?

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Loan Forgiveness After 20 Years Even if not in PI?

Postby Anonymous User » Mon Sep 11, 2017 7:12 pm

So my school advisor told us before graduating we should switch to an income based repayment plan, because the government doesn't define what "significantly different" means, and therefore even if you have a biglaw job which boosts your income, you can select the "not significantly different" box, and therefore just pay a percentage of what your income 2L was.

SO when I went to check this out, I saw that IBR for "new borrowers" will forgive your loans in 20/25 years (which ends up saving me like 240k). Is this true? I thought loan forgiveness was only for people who went into public interest...

If it matters, I have about 8k in loans from undergrad (graduated 2014), and about 160k in loans from law school (graduated 2017)

Thanks guyz!!
Last edited by Anonymous User on Mon Sep 11, 2017 7:17 pm, edited 1 time in total.

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Re: Loan Forgiveness After 20 Years Even if not in PI?

Postby Anonymous User » Mon Sep 11, 2017 7:17 pm

Also, from what it seems, if I pay the minimum every month, the total amount I would pay at the end of the period (240 months) would only be slightly higher than the total amount of my loans right now (160k vs. 192k with 240k being forgiven).

I must be understanding this wrong...right? Because everyone complains about the mountains of interest we have to pay on our student loans...

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A. Nony Mouse

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Re: Loan Forgiveness After 20 Years Even if not in PI?

Postby A. Nony Mouse » Mon Sep 11, 2017 8:10 pm

Yes, the income-based plans come with forgiveness. The issue is that you will be taxed on the forgiven loans as if they were income, up to the amount of your assets (I think? someone else like Johann will have to weigh in on the limits of the taxation, but you do get taxed).

Also the "not significantly different" thing doesn't make much sense to me. Yes, the first year after you graduate you can base your income on the previous year's taxes or whatever is least. But every 12 months you have to re-certify your income based on either taxes or paystubs, so it doesn't last forever. (That said, most people with sticker debt qualify to be on the income-based plan even with biglaw income; your payment will just go up.)

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Re: Loan Forgiveness After 20 Years Even if not in PI?

Postby Pokemon » Mon Sep 11, 2017 8:24 pm

Anonymous User wrote:So my school advisor told us before graduating we should switch to an income based repayment plan, because the government doesn't define what "significantly different" means, and therefore even if you have a biglaw job which boosts your income, you can select the "not significantly different" box, and therefore just pay a percentage of what your income 2L was.

SO when I went to check this out, I saw that IBR for "new borrowers" will forgive your loans in 20/25 years (which ends up saving me like 240k). Is this true? I thought loan forgiveness was only for people who went into public interest...

If it matters, I have about 8k in loans from undergrad (graduated 2014), and about 160k in loans from law school (graduated 2017)

Thanks guyz!!


Lol, is school advisor saying that biglaw income is not significantly different than 2l income because the gov is not defining significantly different??

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Re: Loan Forgiveness After 20 Years Even if not in PI?

Postby Johann » Mon Sep 11, 2017 8:26 pm

how do you know how much money youll pay over 20 years at 10% of your salary? salaries go up.

you also get taxed as if the debt forgiven was income to the extent you have that money in assets (which counts real property like house and 401k)

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Re: Loan Forgiveness After 20 Years Even if not in PI?

Postby Anonymous User » Tue Sep 12, 2017 9:51 am

Pokemon wrote:
Anonymous User wrote:So my school advisor told us before graduating we should switch to an income based repayment plan, because the government doesn't define what "significantly different" means, and therefore even if you have a biglaw job which boosts your income, you can select the "not significantly different" box, and therefore just pay a percentage of what your income 2L was.

SO when I went to check this out, I saw that IBR for "new borrowers" will forgive your loans in 20/25 years (which ends up saving me like 240k). Is this true? I thought loan forgiveness was only for people who went into public interest...

If it matters, I have about 8k in loans from undergrad (graduated 2014), and about 160k in loans from law school (graduated 2017)

Thanks guyz!!


Lol, is school advisor saying that biglaw income is not significantly different than 2l income because the gov is not defining significantly different??


That is actually exactly what he said, pretty much verbatim

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Re: Loan Forgiveness After 20 Years Even if not in PI?

Postby Anonymous User » Tue Sep 12, 2017 9:55 am

Johann wrote:how do you know how much money youll pay over 20 years at 10% of your salary? salaries go up.

you also get taxed as if the debt forgiven was income to the extent you have that money in assets (which counts real property like house and 401k)


Very true, and I hope to have that problem, but at the same time, the choice would be pretty much paying 5k a month towards my loans now, or $1500 a month toward my loans now with a cap at 10%- so even if I make more money down the line, 10% doesn't seem terrible.

I may not be viewing this from the right perspective, however.

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Re: Loan Forgiveness After 20 Years Even if not in PI?

Postby cavalier1138 » Tue Sep 12, 2017 9:59 am

Anonymous User wrote:
Pokemon wrote:
Anonymous User wrote:So my school advisor told us before graduating we should switch to an income based repayment plan, because the government doesn't define what "significantly different" means, and therefore even if you have a biglaw job which boosts your income, you can select the "not significantly different" box, and therefore just pay a percentage of what your income 2L was.

SO when I went to check this out, I saw that IBR for "new borrowers" will forgive your loans in 20/25 years (which ends up saving me like 240k). Is this true? I thought loan forgiveness was only for people who went into public interest...

If it matters, I have about 8k in loans from undergrad (graduated 2014), and about 160k in loans from law school (graduated 2017)

Thanks guyz!!


Lol, is school advisor saying that biglaw income is not significantly different than 2l income because the gov is not defining significantly different??


That is actually exactly what he said, pretty much verbatim


He should probably learn how to read. After he's fired for encouraging a bunch of students to lie to the government and expose themselves to immense liability.

I have no idea where you're getting the $5k a month figure. Even students with twice your debt don't have to pay $5k a month on a standard 10-year repayment plan. And it doesn't sound like you've quite grasped the tax issue. Look up "tax bomb" on these forums.

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Re: Loan Forgiveness After 20 Years Even if not in PI?

Postby Anonymous User » Tue Sep 12, 2017 10:57 am

cavalier1138 wrote:
Anonymous User wrote:
Pokemon wrote:
Anonymous User wrote:So my school advisor told us before graduating we should switch to an income based repayment plan, because the government doesn't define what "significantly different" means, and therefore even if you have a biglaw job which boosts your income, you can select the "not significantly different" box, and therefore just pay a percentage of what your income 2L was.

SO when I went to check this out, I saw that IBR for "new borrowers" will forgive your loans in 20/25 years (which ends up saving me like 240k). Is this true? I thought loan forgiveness was only for people who went into public interest...

If it matters, I have about 8k in loans from undergrad (graduated 2014), and about 160k in loans from law school (graduated 2017)

Thanks guyz!!


Lol, is school advisor saying that biglaw income is not significantly different than 2l income because the gov is not defining significantly different??


That is actually exactly what he said, pretty much verbatim


He should probably learn how to read. After he's fired for encouraging a bunch of students to lie to the government and expose themselves to immense liability.

I have no idea where you're getting the $5k a month figure. Even students with twice your debt don't have to pay $5k a month on a standard 10-year repayment plan. And it doesn't sound like you've quite grasped the tax issue. Look up "tax bomb" on these forums.


The 5k a month was my personal plan initially to pay off my loans as soon as possible (basically I estimated that's what I could afford to pay off per month and still live comfortably. I get the "tax bomb", and I'm not debating that hearing about a $40,000 bill and actually paying it are different, but depending on how much of my loans are forgiven, I thought it might be worth considering

cavalier1138

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Re: Loan Forgiveness After 20 Years Even if not in PI?

Postby cavalier1138 » Tue Sep 12, 2017 11:04 am

Anonymous User wrote:
cavalier1138 wrote:
Anonymous User wrote:
Pokemon wrote:
Anonymous User wrote:So my school advisor told us before graduating we should switch to an income based repayment plan, because the government doesn't define what "significantly different" means, and therefore even if you have a biglaw job which boosts your income, you can select the "not significantly different" box, and therefore just pay a percentage of what your income 2L was.

SO when I went to check this out, I saw that IBR for "new borrowers" will forgive your loans in 20/25 years (which ends up saving me like 240k). Is this true? I thought loan forgiveness was only for people who went into public interest...

If it matters, I have about 8k in loans from undergrad (graduated 2014), and about 160k in loans from law school (graduated 2017)

Thanks guyz!!


Lol, is school advisor saying that biglaw income is not significantly different than 2l income because the gov is not defining significantly different??


That is actually exactly what he said, pretty much verbatim


He should probably learn how to read. After he's fired for encouraging a bunch of students to lie to the government and expose themselves to immense liability.

I have no idea where you're getting the $5k a month figure. Even students with twice your debt don't have to pay $5k a month on a standard 10-year repayment plan. And it doesn't sound like you've quite grasped the tax issue. Look up "tax bomb" on these forums.


The 5k a month was my personal plan initially to pay off my loans as soon as possible (basically I estimated that's what I could afford to pay off per month and still live comfortably. I get the "tax bomb", and I'm not debating that hearing about a $40,000 bill and actually paying it are different, but depending on how much of my loans are forgiven, I thought it might be worth considering


You're not at the critical point where your debt is so massive that you actually stand to make more money in the long run by leaving your debt hanging over your head. Hell, on the IBR/PAYE plan, you're likely to still pay down your debt at the same rate as you would on a 10-year plan. There's just no point in doing this when you have a relatively manageable amount of debt (for your salary) and more than enough money to pay it down quickly.

I think you may have gotten overly enamored with this idea because of the fuckwit advisor who told you to commit fraud. 10% of biglaw salary each month is not far off from a 10-month repayment plan for $168k, especially once you factor in bonuses and raises.



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