IBR discussion Forum

[Veritas]

I'm starting to become less concerned over my overall debt amount now. I always knew IBR existed and the federal LRAP, but it's still scary to be assuming so much debt.

Knowing that I was either gov't or 501c3 work after a graduate, should I take the T20 at sticker in a preferable market over $$ at other schools?

[vanwinkle]

I would certainly agree with this and it's what I'm doing. T14 at near-sticker (I got them to give me token $, but it really doesn't make much of a dent) and using the school's massive public service resources to make connections while I'm attending.

You can certainly do a clerkship and use IBR while you're in it; however, the time you're doing it won't count toward the 10 years of PI work from what I understand. The clock on that will just start after you're out of the clerkship and into the PI job.

No. What gave you the idea that a clerkship was not a qualifying public service position?

To be eligible, a borrower must be employed full-time by a "public service organization." The definition of public service organization includes "a federal, state, local, or Tribal government organization." Being directly employed by the judiciary of the federal government (or a state government) clearly qualifies. See Federal Perkins Loan Program, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program; Final Rule, 73 Fed. Reg. 63,231, 63,242 (Oct. 23, 2008) (clarifying definition of public service organization).

I'm glad you caught this. I went and looked it up myself, and I apparently had a misunderstanding about how broad IBR is. It actually seems to apply to any local/state/federal government jobs.

[vanwinkle]

I'm starting to become less concerned over my overall debt amount now. I always knew IBR existed and the federal LRAP, but it's still scary to be assuming so much debt.

Knowing that I was either gov't or 501c3 work after a graduate, should I take the T20 at sticker in a preferable market over $$ at other schools?

I did. Actually I took a T10 at sticker over $$$$ at a T20. (That T20 was WUSTL, though.)

[Veritas]

I'm starting to become less concerned over my overall debt amount now. I always knew IBR existed and the federal LRAP, but it's still scary to be assuming so much debt.

Knowing that I was either gov't or 501c3 work after a graduate, should I take the T20 at sticker in a preferable market over $$ at other schools?

I did. Actually I took a T10 at sticker over $$$$ at a T20. (That T20 was WUSTL, though.)

I was thinking (hopefully) UCLA or USC.

[YCrevolution]

..

[RednBlack]

Does IBR count if you go into teaching (at any level) ?

IBR only counts if your in a qualifying job, correct ? So on the other end, if you're unemployed then you'd be responsible for payments?

[im_blue]

Does IBR count if you go into teaching (at any level) ?

IBR only counts if your in a qualifying job, correct ? So on the other end, if you're unemployed then you'd be responsible for payments?

IBR only counts if you're in a qualifying job, which includes teaching at a public school (at any level).

[beef wellington]

Wait, I thought anyone could do IBR. I think you guys mean that you have to be doing PI in order to get the ten year forgiveness. Otherwise it's 25 years.

[NosferatuDracon]

This thread just made me consider law school even more than I did before.

[the lantern]

Some FAQs straight from the horse's mouth that really helped me:




Will forgiven loan amounts be taxed as income?

The U.S. Department of the Treasury determined that debt forgiven through PSLF is not considered taxable income under current law. That means that when you qualify for PSLF, you won't get slapped with a huge tax bill as if you'd won the lottery.

Unfortunately, the same good news doesn't extend to debt forgiven through IBR. In response, Congressman Sandy Levin (D-MI) is leading a bipartisan effort to ensure that borrowers who qualify for loan forgiveness through IBR (and Income Contingent Repayment) get the same treatment. Responsible borrowers with modest incomes shouldn't have to pay potentially crippling taxes on forgiven student loans. We are confident that this issue will be resolved before any borrowers qualify for forgiveness through IBR. We'll continue to work on this issue and keep you informed.


Will IBR and Public Service Loan Forgiveness remain available in the future, or could these programs be somehow taken away?

IBR and Public Service Loan Forgiveness were passed into law through the College Cost Reduction and Access Act of 2007, and any major changes to these programs would require new legislation to be passed by Congress and signed by the president. This seems highly unlikely to occur in the foreseeable future, and we recommend that borrowers proceed with confidence.

From IBRinfo. org

The way I understand it is that if you get a qualifying job and keep it (say you work as a district attorney or a public defender), and your income is low compared to your debt load, the max you can pay is 15% of your income for up to 10 yrs (as long as you keep your public service job). As your salary increases, so will your payments to IBR. If you ever make so much money that your IBR payment would be more than the standard ten year payment would have been in the first place, your payment is capped by IBR at the ten year standard rate. This is pretty nice.

[kumba84]

From IBRinfo. org

The way I understand it is that if you get a qualifying job and keep it (say you work as a district attorney or a public defender), and your income is low compared to your debt load, the max you can pay is 15% of your income for up to 10 yrs (as long as you keep your public service job). As your salary increases, so will your payments to IBR. If you ever make so much money that your IBR payment would be more than the standard ten year payment would have been in the first place, your payment is capped by IBR at the ten year standard rate. This is pretty nice.

If I worked at a nonprofit for awhile, switched to DOJ, and then back to another nonprofit, do they all still count for my 10 years? And what if I have a child and decide to take 6 months off? Do I then work 10 years and 6 months before everything is forgiven, or are NO interruptions in your work allowed? I've searched the info websites but couldn't find very specific scenarios.

[beef wellington]

You sure about that 15% figure? That seems higher than what I remember.

edit: Ah, it varies according to your income.

[najumobi]

Some FAQs straight from the horse's mouth that really helped me:




Will forgiven loan amounts be taxed as income?

The U.S. Department of the Treasury determined that debt forgiven through PSLF is not considered taxable income under current law. That means that when you qualify for PSLF, you won't get slapped with a huge tax bill as if you'd won the lottery.

Unfortunately, the same good news doesn't extend to debt forgiven through IBR. In response, Congressman Sandy Levin (D-MI) is leading a bipartisan effort to ensure that borrowers who qualify for loan forgiveness through IBR (and Income Contingent Repayment) get the same treatment. Responsible borrowers with modest incomes shouldn't have to pay potentially crippling taxes on forgiven student loans. We are confident that this issue will be resolved before any borrowers qualify for forgiveness through IBR. We'll continue to work on this issue and keep you informed.

i thought that those working in public service jobs don't have to pay taxes on the forgiven amount.

[beef wellington]

Some FAQs straight from the horse's mouth that really helped me:




Will forgiven loan amounts be taxed as income?

The U.S. Department of the Treasury determined that debt forgiven through PSLF is not considered taxable income under current law. That means that when you qualify for PSLF, you won't get slapped with a huge tax bill as if you'd won the lottery.

Unfortunately, the same good news doesn't extend to debt forgiven through IBR. In response, Congressman Sandy Levin (D-MI) is leading a bipartisan effort to ensure that borrowers who qualify for loan forgiveness through IBR (and Income Contingent Repayment) get the same treatment. Responsible borrowers with modest incomes shouldn't have to pay potentially crippling taxes on forgiven student loans. We are confident that this issue will be resolved before any borrowers qualify for forgiveness through IBR. We'll continue to work on this issue and keep you informed.

i thought that those working in public service jobs don't have to pay taxes on the forgiven amount.

The law will be fixed by the time any of the debt is forgiven, we won't be taxed.

[the lantern]

Some FAQs straight from the horse's mouth that really helped me:




Will forgiven loan amounts be taxed as income?

The U.S. Department of the Treasury determined that debt forgiven through PSLF is not considered taxable income under current law.

i thought that those working in public service jobs don't have to pay taxes on the forgiven amount.

PSLF (Public Service Loan Forgiveness) is nontaxable, if you work in the private sector, your forgiven amount will be taxable (though it says later in the previous post that it "should" be fixed by then because Congress is trying to fix that).

[YCrevolution]

..

[najumobi]

The law will be fixed by the time any of the debt is forgiven, we won't be taxed.

PSLF (Public Service Loan Forgiveness) is nontaxable, if you work in the private sector, your forgiven amount will be taxable (though it says later in the previous post that it "should" be fixed by then because Congress is trying to fix that).

thanks you two.

[vanwinkle]

You sure about that 15% figure? That seems higher than what I remember.

edit: Ah, it varies according to your income.

It's 15% of all income earned above a baseline, which is 150 percent of the poverty level. Because the poverty level figure rises as you add dependents, the more dependents you have, the less you owe. If you don't earn more than the baseline (that is, don't earn more than 150 percent of the poverty level for a family your size) you owe 0. If you do earn more than that baseline, you owe 15% of what you make above that amount. This is why the actual amount owed ends up being less than 15%.

Source: http://www.ibrinfo.org/faq.vp.html#_How_does_IBR

The site also has a chart indicating what 150% of the poverty level is in different parts of the U.S. and with different numbers of dependents, so you can see what the baseline amount is for your situation: http://www.ibrinfo.org/povertylevel_2009.html

[FeuerFrei]

.

[vanwinkle]

You sure about that 15% figure? That seems higher than what I remember.

edit: Ah, it varies according to your income.

It's 15% of all income earned above a baseline, which is 150 percent of the poverty level. Because the poverty level figure rises as you add dependents, the more dependents you have, the less you owe. If you don't earn more than the baseline (that is, don't earn more than 150 percent of the poverty level for a family your size) you owe 0. If you do earn more than that baseline, you owe 15% of what you make above that amount. This is why the actual amount owed ends up being less than 15%.

Source: http://www.ibrinfo.org/faq.vp.html#_How_does_IBR

The site also has a chart indicating what 150% of the poverty level is in different parts of the U.S. and with different numbers of dependents, so you can see what the baseline amount is for your situation: http://www.ibrinfo.org/povertylevel_2009.html

I just thought it said you "won't pay more than 15%" meaning that its a cap and not everyone will actually be paying 15%

It's a formula to determine the maximum amount you'll owe, but that formula is 15% over the baseline income level talked about above. By "capped" they mean that if you would owe less than what that formula says, you'll have to pay the lesser of the two. They won't make you make a loan payment that's 15% over baseline if you don't owe that much.

[bigben]

IBR: We take away your bankruptcy rights and give you indentured servitude.

[09042014]

IBR: We take away your bankruptcy rights and give you indentured servitude.

IBR is about ten thousand times better than bankruptcy. Nobody would loan us money if bankruptcy was an option.

[bigben]

IBR: We take away your bankruptcy rights and give you indentured servitude.

IBR is about ten thousand times better than bankruptcy. Nobody would loan us money if bankruptcy was an option.

And then school would be cheaper.

[09042014]

IBR: We take away your bankruptcy rights and give you indentured servitude.

IBR is about ten thousand times better than bankruptcy. Nobody would loan us money if bankruptcy was an option.

And then school would be cheaper.

Probably more like 30-40K instead of 60-70K. Still more than most of us could afford.

[beef wellington]

From IBRinfo. org

The way I understand it is that if you get a qualifying job and keep it (say you work as a district attorney or a public defender), and your income is low compared to your debt load, the max you can pay is 15% of your income for up to 10 yrs (as long as you keep your public service job). As your salary increases, so will your payments to IBR. If you ever make so much money that your IBR payment would be more than the standard ten year payment would have been in the first place, your payment is capped by IBR at the ten year standard rate. This is pretty nice.

If I worked at a nonprofit for awhile, switched to DOJ, and then back to another nonprofit, do they all still count for my 10 years? And what if I have a child and decide to take 6 months off? Do I then work 10 years and 6 months before everything is forgiven, or are NO interruptions in your work allowed? I've searched the info websites but couldn't find very specific scenarios.

You have to make 120 monthly payments under IBR, ICR, or the standard 10-year plan while working in a public service job. The payments need not be consecutive, but obviously, months when you're not working in a qualified job won't count.

Actually, I think the payments do have to be consecutive. If you take a non-PI job during your ten years then you're no longer eligible for PSFL. The thing I worry about is being unemployed, would that also render you ineligible--the language I saw on IBRinfo.org said "120 uninterrupted payments."