do most people forbear during residency?

Most people used to just defer but this was removed just in time for us to graduate. So now the option is IBR, forbear or 30 year consolidation. You could forbear and just pay the interest but I have a feeling it will probably be about what your IBR or 30 year repayment is. Run the numbers at ibrinfo dot org and finaid dot org.

How nice is it that our class got 6.8% interest, no deferment, and IBR takes our spouses income into consideration.

Scrub MD said:

How nice is it that our class got 6.8% interest, no deferment, and IBR takes our spouses income into consideration.

Click to expand...

You can file separately for income tax purposes and not include your spouse's income. You just have to calculate your monetary benefits from filing jointly and see if that overshadows the benefits of filing separately for the purposes of IBR.

Do an IBR calculator such as this one to see if you will be eligible with spousal income.

Best thing to do is IBR during residency (as your sub staffords do not accrue interest for three years) and then when you are no longer eligible for IBR after residency continue with higher payments.

The benefit of forbearance is no or lower payments for three years during residency but your sub staffords are accruing interest despite not capitalizing until the end of the period.

this is a helpful comparison of ibr, forbearance - 10yr vs extended, and public service

http://www.aamc.org/members/gsa/meetings/dreconomics.pdf

it seems to me, that the ibr and 10yr forbearance are fairly equivocal, with ibr slightly in the lead. however advantage of forbearance would be: living in a costly city - and paying off private/credit cards during residency

the extended forbearance and public service options feels like it would require a pound of flesh by the time you are done with it

I just wanted to see if this was correct...would it be possible to enter IBR during residence and pay several times more than what was due each month and have it count as the 120 payments required to forgive the remaining balance??? For example lets say your monthly IBR is 400$ or whatever, then you pay 1600 a month, that means you would have made 120 payments (4 per month) over the course of 2.5 years....and paid a total of $48,0000 and it seems that after 120 payments the rest is forgiven??? That would total about 150k forgiven??? Am I right with this...it seems too good to be true, I must be missing something???

isailfast said:

I just wanted to see if this was correct...would it be possible to enter IBR during residence and pay several times more than what was due each month and have it count as the 120 payments required to forgive the remaining balance??? For example lets say your monthly IBR is 400$ or whatever, then you pay 1600 a month, that means you would have made 120 payments (4 per month) over the course of 2.5 years....and paid a total of $48,0000 and it seems that after 120 payments the rest is forgiven??? That would total about 150k forgiven??? Am I right with this...it seems too good to be true, I must be missing something???

Click to expand...

isailfast - I am afraid that what you propose is indeed too good to be true. Putting the issue of whether or not we can even count on IBR loan forgiveness aside, I am certain that they require 120 SEPARATE payments. Much like with credit cards - if your minimum payment is $100/mo, but you pay $200, that doesn't mean you get a freebie the following month. And think about it - what they care about is your TIME spent working for a non-profit - that's what you're exchanging for some loan forgiveness at the end. It does them no good to have you pay your loans off super-quick - then they'd miss out on the interest!

If what you propose were possible, a more extreme example could arise: someone with well-off family members could pay $48,000 the first month of repayment (again, equal to 120 payments at $400/mo) and have the rest ($100-$200k+) forgiven! Just won't work that way, sorry.

There are no short cuts on student loans. Accept that, and do your calculations for IBR and a 10 year repayment plan for after residency.

finnegan said:

this is a helpful comparison of ibr, forbearance - 10yr vs extended, and public service

http://www.aamc.org/members/gsa/meetings/dreconomics.pdf

it seems to me, that the ibr and 10yr forbearance are fairly equivocal, with ibr slightly in the lead. however advantage of forbearance would be: living in a costly city - and paying off private/credit cards during residency

the extended forbearance and public service options feels like it would require a pound of flesh by the time you are done with it

Click to expand...

That PDF was excellent, thank you. Really put IBR in perspective for me.

Scrub MD said:

How nice is it that our class got 6.8% interest, no deferment, and IBR takes our spouses income into consideration.

Click to expand...

Luckily, the spousal income rule will be changed as of July 1st, 2010.

"Under changes made to the IBR regulations that will take effect July 1, 2010, married borrowers who
file joint tax returns and who both have eligible student loan debt will have their individual IBR eligibility
determined based on their joint income and the combined eligible loan debt of both spouses. [January
5, 2010]"

Source : http://studentaid.ed.gov/students/attachments/siteresources/IBRQ&A_template_123109_FINAL.pdf

TMP-SMX said:

(as your sub staffords do not accrue interest for three years)

Click to expand...

This is not true with IBR. That was the benefit of Economic hardship, subsidized portion of loans accrues no interest, not necessarily the case with IBR. If your IBR payments do not cover the interest on the subsidized portion of the loans then the remaining amount of interest is covered. I have not been able to figure out how that is calculated, i.e. to which parts of your IBR loans the payments are applied first. Essentially if they apply your payments towards your interest portion of the loan first then it would be very unlikely that it wouldn't be covered.

Depends on the percent of your loans that are sub vs. unsub. If your sub is 20% of your total and you owe 171,000 with 34,000 sub then each monthly interest is 193 on the sub loans. The monthly payment is 77 (for your sub) based on the debt and that leaves a shortfall of 116 they would cover. So you are correct in that it is not 100% of the sub interest it is a good chunk.