Income Based Repayment Plan (IBR)

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Are any graduating vet students trying this plan? I'm just curious. I'm having a hard time trusting it...it just seems to good to be true.

Are you on VIN? They had a really detailed IBR article recently.

Originally Posted by bunnity

Are you on VIN? They had a really detailed IBR article recently.

If this is the article you mean, bunnity, you do not even need to be a VINner to read it. Here's the link!

http://news.vin.com/vinnews.aspx?articleId=20804

Student debt relief option: Instant gain, distant pain

January 4, 2012
By: Edie Lau
For The VIN News Service

Picture this: Ever since you were a kid you wanted to be a veterinarian. You excelled as an undergraduate, made it into veterinary school, survived four more years of education and now, even in a difficult economy, you’ve landed a job. The bad news? You owe $142,000 plus interest on student loans.

...

The situation is not unique to veterinary medicine. Although new veterinary students may have extreme debt-income imbalance, spiraling debt has become a critical issue throughout higher education. That has prompted a variety of government programs to try to ease the pain. Among the options, the program that student-debt specialists believe may be helpful to the greatest number of strapped borrowers is known as Income-Based Repayment, or IBR.

[continued]

Thanks for the article. I guess the best thing is to figure out what my salary is going to be (hopefully next week), and then figure out it I want to take the gamble of IBR or not. The tax at the end is really what is holding me back.

Originally Posted by SilverSpyderGT

If this is the article you mean, bunnity, you do not even need to be a VINner to read it. Here's the link!

http://news.vin.com/vinnews.aspx?articleId=20804

Thank you! That's the one I meant

I was really worried about the tax bill in 20 years when they forgive it...but this CFA came to talk to us for our business class and he seemed to think it was a good idea in the long run. You might try contacting him? He goes to a lot of vet schools it sounds like. He might have some articles or something he could refer you to. http://www.fritzwood.com/

I think he was the one that came to talk to us during first year orientation too. He def is in tune with financial matters of vet professionals... since that's what he lives and breathes. But when he told all of us that we should all be investing now, it kind of made me skeptical. Invest how??? Take out loans that will for sure accumulate 6.8-7.8% interest and invest that money where in order to expect a greater return?

Many professional student loan advisors actually think that that tax obligation at the end is going to be changed because it's so ridiculous.

Anyway, a really great combination seems to be IBR plus Public Service Loan forgiveness. You pay IBR payments for 120 payments (about 10 years) while working at an approved Public Service employer like the government, animal shelter or any other 501(c)3 non profit. There are lots of Veterinary jobs in these sectors, so that shouldn't be a problem, and contrary to what it sounds like, the pay is really not that bad. Many of them are more than starting salaries at small animal clinics.

This is the company that came to speak to us at K-State for our VBMA meeting. REALLY great meeting. http://www.gladvisor.com/

PSLF
http://studentaid.ed.gov/PORTALSWebA...nglish/PSF.jsp

No Tax responsibility with Public Service Loan Forgiveness like their is with the IBR loan forgiveness after 20 or 25 years. That's one of the biggest advantages. And it's ONLY TEN years!

That's really not that long in the long run, and then you will have no loans to pay after that while doing good, needed work in public service. Also, you only have to 30 hours per week to qualify as working for a public service employer full time.

Originally Posted by Etherealsheep

Thanks for the article. I guess the best thing is to figure out what my salary is going to be (hopefully next week), and then figure out it I want to take the gamble of IBR or not. The tax at the end is really what is holding me back.

Fritz Wood, mentioned above, basically told us not to worry about it. His reason for this was that 1) if you're really worried you could theoretically be saving for this payment so that you have the money when it's due or 2) veterinarians are a very good risk for banks, so you'd have no problem taking out a loan to pay the tax, and could then pay off the loan and still come out ahead. He did recommend talking to the GL advisors about it though, since student loans are not his specialty.

I signed up for IBR, and later applied for a Special Direct Consolidation Loan. Now I pay $810 per month to one company instead of way too much to 3 companies. I'm not going to worry about the taxes at the end at this point.

The interest rate still pretty much sucks, but que sera sera.

ursulamajor,
what interest rate did you get, and for what term?

My understanding is that they will not give you a better rate - just the prorated interest rate of all of your loans. My wife's loans would be at 7%, which seems ridiculous to me in this economic climate. What was the consolidation process like?

Originally Posted by wifehasbigloans

ursulamajor,
what interest rate did you get, and for what term?

My understanding is that they will not give you a better rate - just the prorated interest rate of all of your loans. My wife's loans would be at 7%, which seems ridiculous to me in this economic climate. What was the consolidation process like?

Not a better interest rate - the weighted average of something like 6% and 8.5%. 30-year term.
Consolidation was a short, online form. Easy peasy. I did need to reapply for IBR for loans that my primary lender acquired during the consolidation. That was a 2 page form.

IBR, and its related ICR, seem like a good deal. I have some private loans for undergrad that don't have this option, it's pay up, or we'll harass you until you do. It sucks.