Freaked out about loan situation... Forum

[sunynp]

Sorry about that _ I get tired of saying s/he. I think your plan is correct but I still think running it by some current clerks from you school would be worth it. Find out how they are handling the financial side of being a clerk. Also, it doesn't hurt to maintain your network of contacts with other grads from your school.

[DocHawkeye]

I think that it’s worth pointing out that after 25 years of on-time payments under the IBR plan, the remaining balance is forgiven. There is a 10 year provision for public sector workers, but I don't know if PI or goverment law work qualifies.

http://studentaid.ed.gov/PORTALSWebApp/ ... BRPlan.jsp

[wiseowl]

I think that it’s worth pointing out that after 25 years of on-time payments under the IBR plan, the remaining balance is forgiven. There is a 10 year provision for public sector workers, but I don't know if PI or goverment law work qualifies.

http://studentaid.ed.gov/PORTALSWebApp/ ... BRPlan.jsp

Correct.

It is also worth pointing out, however, that that lump sum cancellation is taxable income.

You will need to be slowly packing away savings all along to deal with the sudden tax hit.

[ToTransferOrNot]

FYI: The accrued but unpaid interest does, in fact, capitalize, when you become inelgible for a partial financial hardship. (Regardless of whether you formally leave the IBR program or not.) You may not become ineligible for a PFH the first year out of the clerkship (if you go into biglaw), but you probably will in your second year.

Also, keep in mind that whatever interest that goes unpaid by the IBR payments on your subsidized loans is forgiven for two or three years. If you're going to make extra payments, make sure you direct them to your GradPLUS loans.

Unfortunately, you should also keep in mind that most schools' LRAP plans don't kick in until you are forced to enter repayment, which happens 6 months after your graduation date. You keep acccruing interest for those 6 months; and then, when you enter repayment, all accrued interest capitalizes. You should try to pay down the accrued interest on your highest interest rate loan before you officially enter repayment.

[flcath]

I think that it’s worth pointing out that after 25 years of on-time payments under the IBR plan, the remaining balance is forgiven. There is a 10 year provision for public sector workers, but I don't know if PI or goverment law work qualifies.

http://studentaid.ed.gov/PORTALSWebApp/ ... BRPlan.jsp

Correct.

It is also worth pointing out, however, that that lump sum cancellation is taxable income.

You will need to be slowly packing away savings all along to deal with the sudden tax hit.

This'll be reformed for those who still pay in at 15% of their income. For the new folks who pay in at 10%, who knows.

[ColtsFan88]

I think that it’s worth pointing out that after 25 years of on-time payments under the IBR plan, the remaining balance is forgiven. There is a 10 year provision for public sector workers, but I don't know if PI or goverment law work qualifies.

http://studentaid.ed.gov/PORTALSWebApp/ ... BRPlan.jsp

It's also worth noting that the 25 year forgiveness is for people who don't make a lot and can't service their debt. You pay 10% every year. If you make 160k/year for those 25 years, you've payed 400,000 not including the tax bomb. You're better off just paying down your loans without IBR.

And the 10 year forgiveness is through PSLF and it includes any public sector job. At the very least any public sector job a federal clerk is looking at.