Too much Debt? Forum

[bigmnstyle]

Appreciate it, so it isn't necessarily 10 years for public service work is what I got out of it. Just has to be 120 payments. So you could forgive all your loans before 10 years if you make the 120 payments before 10 years correct? Just by adding an extra payment in here and there.

[Brassica7]

Appreciate it, so it isn't necessarily 10 years for public service work is what I got out of it. Just has to be 120 payments. So you could forgive all your loans before 10 years if you make the 120 payments before 10 years correct? Just by adding an extra payment in here and there.

I do not think that is how it works. Basically, the program wants to allow people with a lot of debt to take public interest jobs. In exchange for 10 years of this type of work, the government forgives your remaining loans, and only asks for payments relative to your income during those years. I believe you need to put in a full ten years of public interest work, not just make 120 payments. You can, however, split up those 10 years. So, you could work as an ADA for 7 years, join a firm for 4, and then go work in legal services for 3 years. Then, you would have all the remaining debt canceled without being taxed on the amount forgiven.
"Public interest job" includes any government or non-profit work. You could teach high school, join the military, etc, and still have your loans forgiven. Your job does not need to be law related in any way.
Also, your payments come out to about 10% of your income. I believe the exact calculation goes something like: take adjusted gross income, subtract 150% of Federal Poverty Line for your family size, pay 15% of the remainder. If you make 50k, you wind up paying about 5k/year for your loans.
This program is one of the reasons I am going to law school in the fall. I had planned to start two years ago, but backed out after acceptances because of debt load and likely salary range.

[bigmnstyle]

very helpful, thanks!!!!

[GettingReady2010]

Appreciate it, so it isn't necessarily 10 years for public service work is what I got out of it. Just has to be 120 payments. So you could forgive all your loans before 10 years if you make the 120 payments before 10 years correct? Just by adding an extra payment in here and there.

I do not think that is how it works. Basically, the program wants to allow people with a lot of debt to take public interest jobs. In exchange for 10 years of this type of work, the government forgives your remaining loans, and only asks for payments relative to your income during those years. I believe you need to put in a full ten years of public interest work, not just make 120 payments. You can, however, split up those 10 years. So, you could work as an ADA for 7 years, join a firm for 4, and then go work in legal services for 3 years. Then, you would have all the remaining debt canceled without being taxed on the amount forgiven.
"Public interest job" includes any government or non-profit work. You could teach high school, join the military, etc, and still have your loans forgiven. Your job does not need to be law related in any way.
Also, your payments come out to about 10% of your income. I believe the exact calculation goes something like: take adjusted gross income, subtract 150% of Federal Poverty Line for your family size, pay 15% of the remainder. If you make 50k, you wind up paying about 5k/year for your loans.
This program is one of the reasons I am going to law school in the fall. I had planned to start two years ago, but backed out after acceptances because of debt load and likely salary range.

This is obviously correct. Otherwise, someone could work for the government, make 120 payments over two years, get their debt completely forgiven, and then start working in the private sector.

[lawgirl333]

Don't take debt for law school at a T3 right now. Go read "jobless JD"

[clintonius]

IBR + LRAP =

You can take advantage of both simultaneously?

Yep. I was just reading about UVA's new LRAP a few days ago, where they actually make your IBR payments if you make under $55k.

That is awesome. I wish other schools would follow suit.

Isn't that really just an LRAP? I mean, it's still great. It just doesn't actually provide any benefit that an LRAP doesn't, in my understanding of the program. I thought the IBR + LRAP comment was hinting at getting a double benefit (which you're not going to find anywhere).

This is obviously correct. Otherwise, someone could work for the government, make 120 payments over two years, get their debt completely forgiven, and then start working in the private sector.

I think it would be difficult to make 120 payments at the minimum monthly amount over two years on a government salary.