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Jenksismyhero
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Most of us here probably have some student loans, so a question for those that have changed up their repayment plan:

 

My wife has about 50k in loans from her grad school and undergrad. We've been paying them back on a 10 year repayment plan starting in about 2009. She (and I) just learned about 6 months ago that she'll be eligible for the public service loan forgiveness program (after 10 years working at a not-for-profit and after 10 years of payments, the remainder of the loans go away).

 

Having just learned this, we've been stupidly paying way more than we should be paying (you're welcome, America) for the last 5 years. Under the current plan we'll pay back what she owes in 10 years anyway, so no benefit for that program.

 

I want to now apply for one of the income-based plans so that we pay back as little as possible. With my loans from law school i'm sure we qualify for some kind of discount on what she has to pay. Has anyone ever applied for one of the income based plans before? Any idea how long it takes and how much of a pain it is? Looks to me like they just look up our income tax filings and I give them my loan information and that's it.

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QUOTE (Jenksismyb**** @ Jul 15, 2014 -> 02:21 PM)
Most of us here probably have some student loans, so a question for those that have changed up their repayment plan:

 

My wife has about 50k in loans from her grad school and undergrad. We've been paying them back on a 10 year repayment plan starting in about 2009. She (and I) just learned about 6 months ago that she'll be eligible for the public service loan forgiveness program (after 10 years working at a not-for-profit and after 10 years of payments, the remainder of the loans go away).

 

Having just learned this, we've been stupidly paying way more than we should be paying (you're welcome, America) for the last 5 years. Under the current plan we'll pay back what she owes in 10 years anyway, so no benefit for that program.

 

I want to now apply for one of the income-based plans so that we pay back as little as possible. With my loans from law school i'm sure we qualify for some kind of discount on what she has to pay. Has anyone ever applied for one of the income based plans before? Any idea how long it takes and how much of a pain it is? Looks to me like they just look up our income tax filings and I give them my loan information and that's it.

 

 

A few years ago, about a year and a half after I got my undergrad and I still didn't have a good job (I was waiting tables) I applied for the income based payments. They asked for a copy of my pay stubs. I believe the dates on them had to be within the last month. At the time my federal student loan was about $22k and monthly payment was around $260. As a server making about $24k-$26k that year they brought my monthly payment down to $203. Once a year they will make you resubmit your pay stubs to adjust your payment accordingly. I am making much better money now so I stopped submitting my paystubs because I figured it wouldn't save me any money any more. When I stopped sending them my pay stubs it went up to $280 per month.

 

My only gripe with the income based payment plan is they don't factor in any other private student loans that you have. They simply look at that one piece of debt you have from the government and look at your income and adjust it based off that. It just doesn't paint the whole picture so in my eyes it is flawed and didn't help me very much.

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I need some similar questions, Jenks. Let me know what you find out.

 

As soon as I'm done with the bar, figuring out loans is my next big project. I have a large sum (six figures) from undergrad and law school, some of which were private Sallie Mae loans at the height of the recession which carry absolutely outrageous interest rates. My general thought was to get a loan to pay them all off at once, and then just pay that loan off. It would be one payment, and would have a lower interest rate than most, if not all, my loans. Not sure if that counts as "consolidation" if it's not through one of the government programs.

 

Most of my loans are federal (all the law school debt, plus some from undergrad), but all are now serviced by Sallie Mae. Not sure if that changes anything.

Edited by farmteam
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I used the Income Based or Income Contingent plan a while back. I don't remember which and I don't remember the difference either. If I recall correctly, they just needed some information from your most recent tax return and I think your spouse's SSN. Didn't take too long, I think a month or less to get it changed.

 

You may want to make sure your wife is set up for that program. My wife worked for a place four years before she found out that she was not signed up for loan forgiveness and so that time did not count.

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So we applied. Pretty easy. They actually linked up with the IRS website and obtained our tax return and then I gave them my student pin so they could look up my loans. Pretty seamless. From my calculator guesstimates I think we'll save about $350/month.

 

I'm really pissed at myself that I didn't look into this until it was almost half way through the term of her forgiveness program. They tell you straight away if you're going to be eligible for the program you should immediately change the repayment to an income based plan. We've probably spent $15-16,000 the last 4 years in payments that we did not need to spend.

 

 

farmteam - i'm in a similar boat. I had 6 figures in loans and have been paying them off the last 6 years on a standard plan. Way, way more than the income plans would require. I've always been terrified of the interest additions after 25-30 years so I never changed the repayment plan. If you get into one of these income based plans your payments are forgiven after 20 or 25 years. I'm nervous about that though. First, the government could always change its mind on that. Second, if my income raises over the next 20-25 years, or say I get an awesome case and make a few hundred thousand off it, i'm out of the program and then im stuck with that interest. And for $90-100k at 4.75-6.5%, that's not exactly pocket change.

 

Edit: you should definitely look into consolidating. Especially since you haven't started paying back yet. I bet you'll save a lot in the long run.

Edited by Jenksismybitch
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QUOTE (Leonard Zelig @ Jul 15, 2014 -> 05:43 PM)
I used the Income Based or Income Contingent plan a while back. I don't remember which and I don't remember the difference either. If I recall correctly, they just needed some information from your most recent tax return and I think your spouse's SSN. Didn't take too long, I think a month or less to get it changed.

 

You may want to make sure your wife is set up for that program. My wife worked for a place four years before she found out that she was not signed up for loan forgiveness and so that time did not count.

 

Yeah we're sending that paper work in too. You can't technically apply for the forgiveness until 2017, but there's an office that will track your payments annually. It also looks like once you've registered they transfer your loan to a specific servicing company that works solely with the PSFL program.

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QUOTE (Jenksismyb**** @ Jul 15, 2014 -> 08:24 PM)
Yeah we're sending that paper work in too. You can't technically apply for the forgiveness until 2017, but there's an office that will track your payments annually. It also looks like once you've registered they transfer your loan to a specific servicing company that works solely with the PSFL program.

Yeah, I think I had the specifics a little off, but essentially she worked for several years that did not count toward the forgiveness.

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I just completed five years teaching in an economically disadvantaged school district. I should be receiving a $5000 credit on my loan. I applied through my universities financial aid office, the next day I received a notice from Sallie Mae that they were processing it. I'm holding my breath it goes smooth.

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QUOTE (Tex @ Jul 16, 2014 -> 07:05 AM)
I just completed five years teaching in an economically disadvantaged school district. I should be receiving a $5000 credit on my loan. I applied through my universities financial aid office, the next day I received a notice from Sallie Mae that they were processing it. I'm holding my breath it goes smooth.

 

That's it? Are you sure there's not a federal forgiveness program for teachers?

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QUOTE (Jenksismyb**** @ Jul 15, 2014 -> 06:19 PM)
So we applied. Pretty easy. They actually linked up with the IRS website and obtained our tax return and then I gave them my student pin so they could look up my loans. Pretty seamless. From my calculator guesstimates I think we'll save about $350/month.

 

I'm really pissed at myself that I didn't look into this until it was almost half way through the term of her forgiveness program. They tell you straight away if you're going to be eligible for the program you should immediately change the repayment to an income based plan. We've probably spent $15-16,000 the last 4 years in payments that we did not need to spend.

 

 

farmteam - i'm in a similar boat. I had 6 figures in loans and have been paying them off the last 6 years on a standard plan. Way, way more than the income plans would require. I've always been terrified of the interest additions after 25-30 years so I never changed the repayment plan. If you get into one of these income based plans your payments are forgiven after 20 or 25 years. I'm nervous about that though. First, the government could always change its mind on that. Second, if my income raises over the next 20-25 years, or say I get an awesome case and make a few hundred thousand off it, i'm out of the program and then im stuck with that interest. And for $90-100k at 4.75-6.5%, that's not exactly pocket change.

 

Edit: you should definitely look into consolidating. Especially since you haven't started paying back yet. I bet you'll save a lot in the long run.

If you get an awesome case and make a few hundred thousand off it, you should pay off the loan ;)

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QUOTE (Tex @ Jul 16, 2014 -> 07:05 AM)
I just completed five years teaching in an economically disadvantaged school district. I should be receiving a $5000 credit on my loan. I applied through my universities financial aid office, the next day I received a notice from Sallie Mae that they were processing it. I'm holding my breath it goes smooth.

I did this recently as well. Do you know what the criteria is for receiving the full $5000? I noticed on the application I would be eligible for "up" to a $5000 grant. Just curious.

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QUOTE (Jenksismyb**** @ Jul 16, 2014 -> 09:28 AM)
That's it? Are you sure there's not a federal forgiveness program for teachers?

 

It goes up to a max of $17,500 if you are teaching certain high value subjects. (STEM) For lowly English teachers it is $5,000.

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QUOTE (lord chas @ Jul 16, 2014 -> 10:46 AM)
I did this recently as well. Do you know what the criteria is for receiving the full $5000? I noticed on the application I would be eligible for "up" to a $5000 grant. Just curious.

 

I'm not certain, it seemed like it was $5,000 or $0. My worry is I was a mid year (Nov) replacement. Based on the rules as everyone is reading them since I was credited with a full year of experience for step increases and retirement, it counts for the loan forgiveness as well. If not I lse out since I am going to a more upscale district next year.

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QUOTE (Tex @ Jul 16, 2014 -> 11:03 AM)
I'm not certain, it seemed like it was $5,000 or $0. My worry is I was a mid year (Nov) replacement. Based on the rules as everyone is reading them since I was credited with a full year of experience for step increases and retirement, it counts for the loan forgiveness as well. If not I lse out since I am going to a more upscale district next year.

That is how I interpreted it as well. I hope we both get some good news soon!

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