How to save over $100k on your student loans

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I have 3 questions

1) How do you calculate how much taxes you may owe after 20 year loan forgiveness.

Whatever is forgiven becomes additional income on top of your salary.

2) If you cannot pay those taxes are you liable for any type of illegal tax evasion? Or does if fall into non-student loan debt and just hurt your credit score... I am not sure how that works.

If you owe them taxes on this year, statue to collect will expire after 10 years. But if they find out if you deliberately evade taxes... There is no statue of limitation (no expiration date). They go back until you are born and chase you until you die (put lien on your assets/garner your wages), so maybe you need to hire a really good lawyer if you are planning to evade taxes.
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pezdispenser said:
I think in that era, FFEL Program loans were the usual Stafford loans but from companies like SallieMae, Nelnet, Access Group, etc. "Direct Loans" were rare during that time. Then the entire student loan industry was socialized ( :laugh: ) around 2010, so all loans from then on were "Direct Loans" from the government.

So my interpretation is you can't have any Staffords from before Oct 1, 2007 (including undergrad), and you need at least 1 direct loan after Oct 1, 2011. I guess Class of 2012 grads would be the first, as long as they don't have Staffords from undergrad. This is all for the latest PAYE 10% x 20 yrs. You can still get the old IBR 15% x 25 yrs.
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Yes , grudgingly realized this yesterday :( so I won't be eligible to save an additional 100k on my loans with paye, but will still save about 100k by using traditional IBR (just mentioned so that my critics understand my arguments still hold in general) .

Thanks for summarizing !
 
Momus said:
I have 3 questions

1) How do you calculate how much taxes you may owe after 20 year loan forgiveness.

Whatever is forgiven becomes additional income on top of your salary.

2) If you cannot pay those taxes are you liable for any type of illegal tax evasion? Or does if fall into non-student loan debt and just hurt your credit score... I am not sure how that works.

If you owe them taxes on this year, statue to collect will expire after 10 years. But if they find out if you deliberately evade taxes... There is no statue of limitation (no expiration date). They go back until you are born and chase you until you die (put lien on your assets/garner your wages), so maybe you need to hire a really good lawyer if you are planning to evade taxes.
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Worry about tax evasion is waste of time . The IRS *WILL* get you for taxes owed! It is a universally known fact. However they will not come get you for tax on debt forgiven beyond your level of assets (known as the solvency / insolvency exclusion) .

But the more important point for the poster momus was responding to is that the IRS is actually more flexible with payment plans than almost any other lender (source: irs and common knowledge) . If you attempt to be up front with them and get a tax lawyer, they will basically allow you to build any type of reasonable payment plan.

So like momus said , the irs is going to get their money one way or another and that is a known and immutable reality. However, that in mind, doing whatever it takes to get your tax money also usually means they will be reasonable with you as long as you aren't actively trying to scam them
 
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grap112ler said:
As fantasyland will soon be coming to an end and my crushing $200k+ loan payments will enter repayment in less than a month, I have started to plan the most viable method of ridding myself of debt, or at least minimizing my suffering. For all you who have graduated this year or who will graduate and who are in the same boat as me, there appears to be a new loan repayment program for your federal loans named "Pay As You Earn."

"Pay As You Earn" (you shall henceforth be known as PAYE) is similar to Income-Based Repayment (IBR). Whereas IBR caps your monthly payment to 15% of you dispensable income (income above 150% poverty level), PAYE caps your monthly payment at 10% of dispensable income. Whereas you are forgiven of any unpaid loans after 25 years with IBR, PAYE reduces loan forgiveness to 20 years. Bear in mind that any loans forgiven at the end may count as earned income in the year they are forgiven, for which you would be taxed at your marginal tax rate, probably around 35% for combined fed, state, and local. As an example, say big brother forgives $100k in loans. That year, you would pay an additional $35k in taxes. Yeah, that hurts, but not as bad as $100k. Anyways, I digress...

Let me show you how this applies to someone like me, assumming a $225k+ loan, yearly income of $130k for the next 25 years (this *should* rise as years go on), interest rate of loans combined is ~7.4%, and married with no kids......

Under IBR, I would make monthly payments of $1341 for the full 25 years because loan does not get payed off during this time, and remainder would be forgiven. Total cost of loan over 25 years is $402k, or about 179% of original loan, plus any tax from loan forgiveness.

Under PAYE, I would make monthly payments of $894 for the full 20 years, then remainder would be forgiven. Total cost of loan over 20 years is $215k, or 96% of original loan, plus any tax from loan forgiveness (this tax would likely be higher than IBR example, but not by more than about $50k).

As you can see, this PAYE program is a no-brainer from a purely financial perspective, and no other repayment plan even remotely can compare to this (except for public service 10-year thingy). The government actually REWARDS you for NOT trying to pay off your loan as quickly as possible. It is as if they are giving you a 0% interest rate on a 20-year loan (not including lump sum tax after 20 years from loan amount forgiven, but you can easily plan ahead for that).

What's the catch, you may ask? Nothing really, but there are two things in order to qualify:

First, no loans may have been dispersed before 2007 (or maybe 2006, can't remember). Also, one loan must have been dispersed after October 2011, or you must have done a direct consolidation after October 2011.

Second, you must ethically be OK with doing this. While one person may view this as a tax rebate, another may view this as cheating the government and, hence, your fellow Americans.

.....it appears fantasyland may not have ended after all. Thank you Obama!
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This is actually the same thing as IBR. 'Pay as you earn' was just a phrase by the Obama administration to promulgate their work. Only changes are, as you mentioned, the payment went from 15% to 10%, and slightly reduced repayment length. Ho Hum.
 
So is an IBR plan eligible for loan forgiveness after 25 years of repayment with the requirement to pay taxes on the amount forgiven as well?
 
Orbit314 said:
So is an IBR plan eligible for loan forgiveness after 25 years of repayment with the requirement to pay taxes on the amount forgiven as well?
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"The maximum repayment period is 25 years. After 25 years, any remaining debt will be discharged (forgiven). Under current law, the amount of debt discharged is treated as taxable income, so you will have to pay income taxes 25 years from now on the amount discharged that year."

http://www.finaid.org/loans/ibr.phtml

If this law changed in the future, most likely they will restrict to middle and low income borrowers, not well off pharmacists and physicians. The public thinks we are overpaid anyways.
 
pezdispenser said:
Exactly! I think they will send you a 1099 which you will have to declare as income in that year. Extrapolating today's tax brackets even though we know they won't be the same in 20 years, you would pay 33% + state income tax = $89k+!
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does he still think he will save over 100 k?
 
Pharmacy students- there's no easy out of this. The loan will have to be repaid one way or another. You can do what I did. I worked my butt off during pharmacy school and made $30,000 a year as an intern. Except for social security and medicare tax, I got to keep most of the money I earned because I didn't make enough and because of the educational tax credit. The money went toward my tuition.

Borrow less and work hard. That's how you do it.
 
bmbiology said:
pharmacy students- there's no easy out of this. The loan will have to be repaid one way or another. You can do what i did. I worked my butt off during pharmacy school and made $30,000 a year as an intern. Except for social security and medicare tax, i got to keep most of the money i earned because i didn't make enough and because of the educational tax credit. The money went toward my tuition.

Borrow less and work hard. That's how you do it.
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No. WE WANT BAILOUT
 
BMBiology said:
Pharmacy students- there's no easy out of this. The loan will have to be repaid one way or another. You can do what I did. I worked my butt off during pharmacy school and made $30,000 a year as an intern. Except for social security and medicare tax, I got to keep most of the money I earned because I didn't make enough and because of the educational tax credit. The money went toward my tuition.

Borrow less and work hard. That's how you do it.
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$30k/year? That's an impressive number. How many hours were you working per week during school?
 
BMBiology said:
does he still think he will save over 100 k?
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Haha, so I spent about an hour doing some number crunching in Excel, and it turns out that your question is actually extremely complicated to answer. The easiest way to answer is to put all paid/gained in 2012 value (for example, if we assume 2% inflation for the next 20 years, $1 in 2032 will only be worth $0.69 in today's money, kinda like how your grandparents used to pay a nickel to go to the movie theater). You have to do it this way to project income tax rates for 2032. I assumed 2% inflation. Since many are of the opinion that paying off the loan as soon as possible is the way to go, I will compare PAYE to paying off the loan in 10 years.

Paying the loan ($225k balance today, 7.4% interest rate) off fully in 10 years requires monthly payments of $2659. The total cost is $319k, while the present value (or 2012 value) of all those payments is $289k.

Doing it the PAYE way (taking into account 3% annual pay raise as previously described) costs a total of $215k without taking tax into account. The present value of these payments is $177k. The present value of the loan amount forgiven in 2032 after 20 years of payments is $233k. Without taking taxes into effect (we're not sure even if loan amount forgiven would be taxed) you save $289k - $177k = $112k in 2012 dollars when looking just at the value of the payments you made.

Projecting taxes on the $233k loan amount forgiven becomes a little tricky (we're still not sure if this would even be taxable income). If you don't minimize assets, as others have described, I project you would be taxed federally at a rate around 33%. This would cost you $77K in today's dollars. State taxes depend on where you live. Texas and Nevada would be nice places to live in 2032, as they have no income tax. For someone like myself that lives in CA (one of the highest rates in the nation for high income earners), tax rate is about 10.3%. This would cost you $24k in today's dollars. Total tax cost $101k in today's dollars.

Subtracting the money saved in payments from the amount of taxes you paid, you only save $11k. You would save substantially more if you aggressively minimized you assets, as others have described.

However, there is something else very important to consider. If you want to purchase a home in the first 10 years after you graduate and you're making payments of $2659 per month towards a school loan, this SEVERELY limits the size of the home loan you would qualify for. Maybe not a big deal in some parts of the country where nice homes cost $200k. However, if you're living somewhere like me where nothing decent (3bd/2ba/small yard) sells for less than $400k, forget it. No way are you buying until that loan is paid off and interest rates for home loans are back to like 6% and home prices have rebounded, assuming they both eventually go back up.

In summary, yes, you might still save over $100k in today's dollars if you are not heavily taxed on the forgiven debt. But even if you are taxed heavily, you still save a little money, and you save a ton of money by getting a home now/soon rather than 10 years down the road when rates and prices have risen.
 
grap112ler said:
Haha, so I spent about an hour doing some number crunching in Excel, and it turns out that your question is actually extremely complicated to answer. The easiest way to answer is to put all paid/gained in 2012 value (for example, if we assume 2% inflation for the next 20 years, $1 in 2032 will only be worth $0.69 in today's money, kinda like how your grandparents used to pay a nickel to go to the movie theater). You have to do it this way to project income tax rates for 2032. I assumed 2% inflation. Since many are of the opinion that paying off the loan as soon as possible is the way to go, I will compare PAYE to paying off the loan in 10 years.

Paying the loan ($225k balance today, 7.4% interest rate) off fully in 10 years requires monthly payments of $2659. The total cost is $319k, while the present value (or 2012 value) of all those payments is $289k.

Doing it the PAYE way (taking into account 3% annual pay raise as previously described) costs a total of $215k without taking tax into account. The present value of these payments is $177k. The present value of the loan amount forgiven in 2032 after 20 years of payments is $233k. Without taking taxes into effect (we're not sure even if loan amount forgiven would be taxed) you save $289k - $177k = $112k in 2012 dollars when looking just at the value of the payments you made.

Projecting taxes on the $233k loan amount forgiven becomes a little tricky (we're still not sure if this would even be taxable income). If you don't minimize assets, as others have described, I project you would be taxed federally at a rate around 33%. This would cost you $77K in today's dollars. State taxes depend on where you live. Texas and Nevada would be nice places to live in 2032, as they have no income tax. For someone like myself that lives in CA (one of the highest rates in the nation for high income earners), tax rate is about 10.3%. This would cost you $24k in today's dollars. Total tax cost $101k in today's dollars.

Subtracting the money saved in payments from the amount of taxes you paid, you only save $11k. You would save substantially more if you aggressively minimized you assets, as others have described.

However, there is something else very important to consider. If you want to purchase a home in the first 10 years after you graduate and you're making payments of $2659 per month towards a school loan, this SEVERELY limits the size of the home loan you would qualify for. Maybe not a big deal in some parts of the country where nice homes cost $200k. However, if you're living somewhere like me where nothing decent (3bd/2ba/small yard) sells for less than $400k, forget it. No way are you buying until that loan is paid off and interest rates for home loans are back to like 6% and home prices have rebounded, assuming they both eventually go back up.

In summary, yes, you might still save over $100k in today's dollars if you are not heavily taxed on the forgiven debt. But even if you are taxed heavily, you still save a little money, and you save a ton of money by getting a home now/soon rather than 10 years down the road when rates and prices have risen.
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Good analysis, and great point about homes. People on here seem to be slightly underinformed about income to debt ratios and mortgage requirements.

It really is all about minimizing your assets. I have moved back slightly from my aggressive advocacy for students to use the IBR system, as it really makes much more sense in specific cases but not for everyone (ie my plan to have 0 assets in the bank, in 401k, and in mortgage when forgiveness time arrives) Another advantage that IBR can give is that it can allow you career freedom -- i plan on starting a non pharmacy business at some point after saving up some capital -- having that business as a tax and asset shield would help come tax time, and being able to employ yourself and have 0 earnings some years saves even more IBR money.
 
This time I played around with the IBR 15% x 25 yr calculator: http://www.finaid.org/calculators/ibr.phtml because I don't think many people are even eligible for the PAYE 10% x 20 yr plan yet.

I found that your loans need to exceed roughly 2 times your starting AGI for there to be any balance left at 25 years, to be forgiven.

I put 1 single person
3% for all discount rate, CPI, income growth, poverty level change
$110,000 AGI. Remember 401(k) contributions reduce your AGI.
$56,000 subsidized, $164,000 unsub = $220,000 total. 6.8% interest rate for both.

So a pharmacist's salary is high enough that the 15% payment, increasing 3% with raises every year, is already enough to pay off $220k in 25 years, so that nothing gets forgiven! So I think IBR 15% x 25 yrs is a bad deal.

Especially if you have a high interest rate of 6.8%, stretching out repayment to 25 years under IBR will have you paying more interest. In my example, total interest was $275k on IBR and $84k on the 10 year plan.

But IBR can help by lowering your monthly payment. In my example, it started out at $1,165 and increased to $2,369 in the 25th year. The 10 yr plan was $2,531.
 
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Suppose you're an oldster who had loans before 2007 and graduated before this year. Would it be possible to pay off your pre-2007 loans and then get a new loan to go take a few classes in auto body repair or semiotics or something? It seems to me that you would then qualify. A full-time pharmacist probably wouldn't qualify for new loans because we make too much money. But this might work for unemployed or underemployed pharmacists.
 
pezdispenser said:
So I think IBR 15% x 25 yrs is a bad deal.
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I agree that following the IBR 15% plan is a bad idea for pharmacists. The loan is way too expensive. I'm surprised more people don't use it, though, if for nothing else than to give themselves a safety net to fall back on if they can't afford the $2500 payment one month or two when following a 10-year payment plan. That was my plan until I learned about PAYE 10% plan.
 
pezdispenser said:
So a pharmacist's salary is high enough that the 15% payment, increasing 3% with raises every year, is already enough to pay off $220k in 25 years, so that nothing gets forgiven! So I think IBR 15% x 25 yrs is a bad deal.
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That's what I have been saying! IBR is not designed for well-paid pharmacists. The compounding interest will crush you.

With 6.8% interest rate, don't take 25, 20 or even 10 years to pay it back. You can seriously do it in 5 years. $225,000 student loan + 6.8% interest = $4,434 monthly payment over 5 years. That's a lot of money but with some planning, you can do it.
 
Rx MPLS said:
$30k/year? That's an impressive number. How many hours were you working per week during school?
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I worked at least 20 hours while I was in school and full-time on my breaks. $30,000 is excessive but I think $20,000 is doable.
 
On the side note: in retrospective, working so many hours in retail helped me realize how crappy my life would be if I stayed in retail after graduation. You just don't know how crappy retail is until you work 40 hours a week x 52 weeks.
 
SoylentGreen said:
Suppose you're an oldster who had loans before 2007 and graduated before this year. Would it be possible to pay off your pre-2007 loans and then get a new loan to go take a few classes in auto body repair or semiotics or something? It seems to me that you would then qualify. A full-time pharmacist probably wouldn't qualify for new loans because we make too much money. But this might work for unemployed or underemployed pharmacists.
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I don't think you can get student loans after you have received a doctorate degree.
 
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Interesting development in the "pending legislation" arena:

http://www.bloomberg.com/news/2012-...ection-targeted-for-overhaul-in-congress.html

Bill is to be introduced over the next few weeks overhauling student loan collection.

Original draft of legislation will eliminate PSLF and other loan forgiveness programs for all new student loans (existing student loans not affected).

Interest rates would be tied to rates on treasury bills, and interest would be capped at 50% of the face value of loans at the time of graduation ($150k loan would be legally capped at $75k interest).

Will be interesting to see how the bill morphs over time.

EDIT: would also be curious to see how collection would work for someone who is 1099'd (like a consultant or something) and not subject to similar deductions...probably just have to write a check off or something. also would like to see how democratic opposition would go on this.
 
BMBiology said:
I worked at least 20 hours while I was in school and full-time on my breaks. $30,000 is excessive but I think $20,000 is doable.
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I'm doing exactly what you did but I'm starting to burn out. What did you do when that happened? There's only a week left in the semester so I had good timing but still... it's getting annoying. I think I've only had 5 days off the whole semester.
 
Notecard said:
I'm doing exactly what you did but I'm starting to burn out. What did you do when that happened? There's only a week left in the semester so I had good timing but still... it's getting annoying. I think I've only had 5 days off the whole semester.
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One day at a time....I'm in your boat. Work school work school work school. I was sick over thanksgiving break. I think my bodyjust wanted to give me a giant **** you. Some unsolicited advice: exercise if you can and eat lots of nutritious food. Veggies are bomb.
 
confettiflyer said:
Interesting development in the "pending legislation" arena:

http://www.bloomberg.com/news/2012-...ection-targeted-for-overhaul-in-congress.html

Bill is to be introduced over the next few weeks overhauling student loan collection.

Original draft of legislation will eliminate PSLF and other loan forgiveness programs for all new student loans (existing student loans not affected).
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I am not surprised at all. Can you imagine how the public would react when they read "$700,000 in student loan debt was forgiven to surgeon"? The national debt is 16 trillion. Changes have to be made. Helping "well-paid" health professionals is not a priority.
 
Notecard said:
I'm doing exactly what you did but I'm starting to burn out. What did you do when that happened? There's only a week left in the semester so I had good timing but still... it's getting annoying. I think I've only had 5 days off the whole semester.
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Honestly, it wasn't easy to do. You are constantly working or studying. It's a high price to pay. If you want to make more money, volunteer to work on holidays so you would get holiday pay. That's also a high price to pay.
 
BMBiology said:
I am not surprised at all. Can you imagine how the public would react when they read "$700,000 in student loan debt was forgiven to surgeon"? The national debt is 16 trillion. Changes have to be made. Helping "well-paid" health professionals is not a priority.
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Too bad the surgeon wouldn't qualify...assuming they were making the average salary for a surgeon ($312,101).

But my suspicions were correct -- existing loans would be grandfathered in. I have a feeling this proposed bill would cost the government *more* with the interest rate caps for everyone. Curious to see the GAO/CBO analysis when the bill is introduced.
 
confettiflyer said:
Too bad the surgeon wouldn't qualify...assuming they were making the average salary for a surgeon ($312,101).
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The years spent in residency and fellowship would also count. Pretty sweet deal.
 
BMBiology said:
Here's an article in Forbes about the lack of funding for student loan forgiveness:

http://www.forbes.com/sites/alisong...ent-loan-forgiveness-programs-short-on-funds/

Elections are over. Tough decisions have to be made. The government has a tendency to give something and then later, taking it back.
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I don't see how you drew that conclusion -- this article discusses a lack of funding with respect to state and county programs, AmeriCorps, and some obscure fund for federal prosecutors. It also mentions that more money has gone into federal programs and/or were created (PSLF, Stafford, nursing loan programs).
 
confettiflyer said:
I wouldn't call a year old opinion paper from the guy who runs a student loan website "buzz." The Petri legislation is the first solid potential congressional action I've seen on this front.
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What make you think this is the only article out there?

Like I had previously said, the public doesn't have sympathy for healthcare professionals. Teachers and firefighters? Yes. Successful plastic surgeons working in Beverly Hills? No.
 
confettiflyer said:
I don't see how you drew that conclusion -- this article discusses a lack of funding with respect to state and county programs, AmeriCorps, and some obscure fund for federal prosecutors. It also mentions that more money has gone into federal programs and/or were created (PSLF, Stafford, nursing loan programs).
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This is just a start. What make you think there's money for all of these programs? The government will cut these programs before they take money away from medicare reserved for grandma and grandpa.
 
BMBiology said:
What make you think this is the only article out there?

Like I had previously said, the public doesn't have sympathy for healthcare professionals. Teachers and firefighters? Yes. Successful plastic surgeons working in Beverly Hills? No.
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I think it's a non-issue with the public, and it would be tricky PR separating out primary care physicians from their plastic surgeon brethren (not to mention a legislative nightmare). There are more effective villains out there anyway.

The way CCRA 2007 was written, it doesn't "cost" the federal gov't anything, it's not a budgetary item that needs appropriations on an annual basis. You'd have more political capital to lose than gain going after it.

That said, the whole "give then take away" argument is bunk as evidenced by the Petri bill. It's more like "give for now...then take it away for future people who aren't in it" which is the M.O. for entitlement programs going forward.
 
I find it difficult to believe it will be grandfathered in especially when there's no funding for the program. Don't be surprised to see politicians using successful healthcare professionals as examples to why the program needs to change. 10, 20 years is a long time. A lot of time for changes.
 
confettiflyer said:
I think it's a non-issue with the public, and it would be tricky PR separating out primary care physicians from their plastic surgeon brethren (not to mention a legislative nightmare). There are more effective villains out there anyway.

The way CCRA 2007 was written, it doesn't "cost" the federal gov't anything, it's not a budgetary item that needs appropriations on an annual basis. You'd have more political capital to lose than gain going after it.

That said, the whole "give then take away" argument is bunk as evidenced by the Petri bill. It's more like "give for now...then take it away for future people who aren't in it" which is the M.O. for entitlement programs going forward.
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This. But no point arguing with BMB about it. He is obsessed with hating IBR for some reason.
 
BMBiology said:
I find it difficult to believe it will be grandfathered in especially when there's no funding for the program. Don't be surprised to see politicians using successful healthcare professionals as examples to why the program needs to change. 10, 20 years is a long time. A lot of time for changes.
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If you see how federal programs on student loans have come and gone over 10 years, you'll see a lot of programs that don't exist but are addressed because students are grandfathered in.

You keep talking about funding...but I've been posting over and over again that there is no "appropriation" to this program so to argue that there's "no funding" is fundamentally incorrect.

CBO analysis: http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/82xx/doc8259/hr2669.pdf

$2.8B in "cost" for IBR/PSLF over 10 years is not worth fighting over, much less even discussing. This is the equivalent of penny-pinching on the federal level.
 
Or maybe you just don't like realities. Never bet your money in a government that owes $16 trillion.
 
BMBiology said:
I find it difficult to believe it will be grandfathered in especially when there's no funding for the program. Don't be surprised to see politicians using successful healthcare professionals as examples to why the program needs to change. 10, 20 years is a long time. A lot of time for changes.
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If you see how federal programs on student loans have come and gone over 10 years, you'll see a lot of programs that don't exist but are addressed because students are grandfathered in.

You keep talking about funding...but I've been posting over and over again that there is no "appropriation" to this program so to argue that there's "no funding" is fundamentally incorrect.

CBO analysis: http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/82xx/doc8259/hr2669.pdf

$70M in savings over 10 years isn't even worth sneezing about.
 
confettiflyer said:
If you see how federal programs on student loans have come and gone over 10 years, you'll see a lot of programs that don't exist but are addressed because students are grandfathered in.

You keep talking about funding...but I've been posting over and over again that there is no "appropriation" to this program so to argue that there's "no funding" is fundamentally incorrect.

CBO analysis: http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/82xx/doc8259/hr2669.pdf

$2.8B in "cost" for IBR/PSLF over 10 years is not worth fighting over, much less even discussing. This is the equivalent of penny-pinching on the federal level.
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And this analysis was done in 2007? Student debt has gone out of control since then if you have not noticed.
 
ok that was weird...edited the last line (quoted the wrong thing) and it made a new post.
 
BMBiology said:
And this analysis was done in 2007? Student debt has gone out of control since then if you have not noticed.
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Yo dude... the CBO analysis was done in 2007 cuz the dang law was written and passed in 2007. This whole discussion we're having is about a law and program that were passed in 2007.
 
BMBiology said:
Or maybe you just don't like realities. Never bet your money in a government that owes $16 trillion.
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You keep talking about these generalities and have this vague references to an overspending government and things being taken away...and you keep posting these weird articles/opinion pieces from crap publications like Forbes.

Here I am giving you actual relevant CBO analysis and current pending legislation.

I'm still half drunk from Midyear...am I missing something?
 
Knowing what you know today, you seriously think it doesn't cost the government that much money? If anything, this type of program only encourages people to borrow more money and encourages universities to charge more tuition. Student loan debt is now over $1 trillion. More than credit card debt. Did the CBO predict that?

The program was designed for low paying public employees like teachers. It did not consider physicians, dentists, lawyers, pharmacists would also need this type of programs. That's where the cost is.

Look, we can go back and forth. It doesn't matter. I wouldn't count on the government on this one.
 
confettiflyer said:
You keep talking about these generalities and have this vague references to an overspending government and things being taken away...and you keep posting these weird articles/opinion pieces from crap publications like Forbes.

Here I am giving you actual relevant CBO analysis and current pending legislation.

I'm still half drunk from Midyear...am I missing something?
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Only that he doesn't like the program and wants it to exclude pharmacists for some reason I've yet to grasp. Really, it's almost pointless to argue with him, although you have done a great job. Your facts are solid: it's not an appropriation, high income borrowers like our Beverly Hills plastic surgeon are already excluded by virtue of their high income, and any changes made to the program will likely apply to new borrowers moving forward. Existing participants will likely be grandfathered in. But I don't see substantive changes coming. The federal government has much bigger fish to fry at this point.
 
BMBiology said:
This is what I mean when I say don't count on the government on keeping its words. The 30-year mortgage tax deduction is on the chopping block:

http://dealbook.nytimes.com/2012/11...tion-once-a-sacred-cow-is-seen-as-vulnerable/
Click to expand...

I'm pretty sure someone making 250K can stomach paying an additional 1400 instead of having taxes increased by some undetermined percentage. You're also changing the subject for some reason.

Can you provide some substantial evidence for what you're trying to convey here?
 
BMBiology is funny sometimes but really the IBR rant is getting old.

Not everyone has the opportunity to come out of school with low debt like you did. Many are not able to work much due to other obligations in life, and must accrue debt to enter the career field we want.

Not everyone will even make enough to pay off their loans. Is the govt going to pass a bill sometime in the near future that ****s over all of its citizens that it helped educate ? No. It is a no brainer to bet on IBR , especially given obama's re-election and the resurgence of the democrats. For some people, it makes more sense to bet a 200K NPV win on IBR existing down the line, than it does to break their backs paying $2500/month on loans when they can't necessarily even get a job in their field.

BMBiology.. your IBR arguments make no sense. (a letter about physicians abusing PSLF through residency and fellowship? very relevant , yes)
 
^^this is coming from someone who didn't know that he didn't qualify for PAYE until I posted the restrictions. Making life changing decisions when he didn't even know the facts
 
type b pharmD said:
Been planning to use this repayment program ever since obama announced it.

Only caveat will be I will have to pay off my pre-2006 loans before applying.

Overall, I think PAYE will save me about $150k on $275,000 of loans, especially if I end up only working part time. Unfortunately, the forgiveness ends up being around 400k (550k if working part time) since loan payments dont even cover the interest. Thankfully, tax on debt forgiveness only applies to the extent that you are solvent (only pay tax on forgiveness equal to the sum of your assets.. sure as hell dont plan on having 400k in declared assets that year)
Click to expand...

[/I]
type b pharmD said:
Yes , grudgingly realized this yesterday :( so I won't be eligible to save an additional 100k on my loans with paye, but will still save about 100k by using traditional IBR (just mentioned so that my critics understand my arguments still hold in general) .

Thanks for summarizing !
Click to expand...

Still counting on working part-time and qualifying for IBR? Still counting on the government not taxing your loan forgiveness?
 
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