go to USC with IBR?

[TeethAreUs]

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Hello, I have been reading about Income Based Repayment plan for awhile now, and I have come to the following conclusion, please correct me if I'm wrong.

If you work 10 years in public service/non profit, your loans will be forgiven after 10 years. Or work in private practice and have your loans forgiven after 20 years.

You pay roughly 10% of your earnings per year. the IBR payment has to be below the standard 10 year repayment of the loan.

This brings me to my question. Why would you not go to the most expensive school, and take out the maximum amount of loan you're qualified for? Since the payment would be the same throughout the 20 years, and by taking out max loans, you have the potential to earn more during the 20 year payback period.

I have read some negative posts about USC, but I believe school doesn't make you a good dentist, you make yourself a good dentist. It has always been the pricetag that scares me, but with IBR the more expensive the school is, the more you're allowed to make.

a few additional questions. when do you apply for the IBR? every year when you sign up for FAFSA? or do you sign up upon graduation?

I also heard about the political uncertains surrounding IBR, policies could change and what not, is this another incentive to vote for Obama for the next 4 years to keep IBR in tact? thanks in advance for answers!

 

[DMDWANNABEE]

Hello, I have been reading about Income Based Repayment plan for awhile now, and I have come to the following conclusion, please correct me if I'm wrong.

If you work 10 years in public service/non profit, your loans will be forgiven after 10 years. Or work in private practice and have your loans forgiven after 20 years.

You pay roughly 10% of your earnings per year. the IBR payment has to be below the standard 10 year repayment of the loan.

This brings me to my question. Why would you not go to the most expensive school, and take out the maximum amount of loan you're qualified for? Since the payment would be the same throughout the 20 years, and by taking out max loans, you have the potential to earn more during the 20 year payback period.

I have read some negative posts about USC, but I believe school doesn't make you a good dentist, you make yourself a good dentist. It has always been the pricetag that scares me, but with IBR the more expensive the school is, the more you're allowed to make.

a few additional questions. when do you apply for the IBR? every year when you sign up for FAFSA? or do you sign up upon graduation?

I also heard about the political uncertains surrounding IBR, policies could change and what not, is this another incentive to vote for Obama for the next 4 years to keep IBR in tact? thanks in advance for answers!

I am a little confused here. Why would going to a more expensive school mean that you are allowed to make more? It would mean that you can use IBR at a higher income level because the standard 10-year repayment plan's monthly payment on a 450k loan would be insane, but that doesn't mean you keep more money. It basically just means you don't have to stick with IBR if the standard payment becomes less than 10% of you income, right?

Plus, because the remaining principle is considered taxable income at the point of forgiveness, how are you supposed to pay? The principle would balloon to well over a million by that time, no? So you're supposed to pay 35% of that 1.7 mil or whatever + the tax on you actual salary that year?

So what are we hoping for here? Massive inflation? Government bailout? Maybe I'm just severely mathematically impaired? (Always a possibility..)

 

[cmcner]

Hello, I have been reading about Income Based Repayment plan for awhile now, and I have come to the following conclusion, please correct me if I'm wrong.

If you work 10 years in public service/non profit, your loans will be forgiven after 10 years. Or work in private practice and have your loans forgiven after 20 years.

You pay roughly 10% of your earnings per year. the IBR payment has to be below the standard 10 year repayment of the loan.

You are pretty much right, the 20 year 10% thing isn't solid yet, Obama just said he'd do it but the 25 year 15% thing is signed into law. Also your payment maxes out at you 10 year amount so it can also equal it.

This brings me to my question. Why would you not go to the most expensive school, and take out the maximum amount of loan you're qualified for? Since the payment would be the same throughout the 20 years, and by taking out max loans, you have the potential to earn more during the 20 year payback period.

This is basically a financial strategy that you can take, if the laws stand it's not very risky. The only down side is the more you have forgiven with IBR the more of a forgiven portion you have at the end of the payments and that will count as taxable income which could be a pretty penny, but if you do PSLF (public service loan forgiveness) coupled with IBR there really is no down side to this plan, other than the generally lower salaries in the public sector, because the forgiven portion is tax free. In theory you could make more money because if you took out $500,000 in loans you would have to earn over $500,000 per year for negative amortizationto kick in and add all the compounded interest back onto your principle.

a few additional questions. when do you apply for the IBR? every year when you sign up for FAFSA? or do you sign up upon graduation?
You apply for IBR and PSLF after graduation.

I also heard about the political uncertains surrounding IBR, policies could change and what not, is this another incentive to vote for Obama for the next 4 years to keep IBR in tact? thanks in advance for answers!

Anything that is a law has political uncertainties because it can always be changed by congress. It's unlikely that things will change in the next few years, as far as taking it away goes, but it's in the hands of Washington, so logic does not apply.

I am a little confused here. Why would going to a more expensive school mean that you are allowed to make more? It would mean that you can use IBR at a higher income level because the standard 10-year repayment plan's monthly payment on a 450k loan would be insane, but that doesn't mean you keep more money. It basically just means you don't have to stick with IBR if the standard payment becomes less than 10% of you income, right?
Not really, if you have less in loans you can reach the point where all the interest that wasn't paid due to your income based repayment undergoes negative amortization and all the interest from years of low loan payments in the beginning would be compounded onto your principle and you would start paying interest on your interest, ouch! So if you have $300,000 in loans at graduation that would happen when your Adjusted Gross Income for the year exceeded $300,000, so you're in a much safer place as far as financial mobility goes if your loans are a lot higher, like $500,000. Why does this make sense, because the government created the program and it's flawed.

Plus, because the remaining principle is considered taxable income at the point of forgiveness, how are you supposed to pay? The principle would balloon to well over a million by that time, no? So you're supposed to pay 35% of that 1.7 mil or whatever + the tax on you actual salary that year?
Thats why tax free loan forgiveness is so appealing in PSLF. This is a major down side of IBR if you don't pair it with PSLF.

So what are we hoping for here? Massive inflation? Government bailout? Maybe I'm just severely mathematically impaired? (Always a possibility..)

Government bailout via PSLF

 

[TeethAreUs]

Government bailout via PSLF

Thanks for the answer cmcner, I'm gonna jump on the IBR wagon, I don't see this program last long.

 

[mike3kgt]

Thanks for the answer cmcner, I'm gonna jump on the IBR wagon, I don't see this program last long.

It is a matter of time when the "IBR" bubble will burst. It is a scary thought when people are planning their educational futures around getting a student loan bailout.

Word of the wiser: go to the least expensive school you are able to get into, take out the least amount of loans to live on, and live like a student for ALL 4 YEARS. This is the path of success.

 

[charlestweed]

It is a matter of time when the "IBR" bubble will burst. It is a scary thought when people are planning their educational futures around getting a student loan bailout.

Word of the wiser: go to the least expensive school you are able to get into, take out the least amount of loans to live on, and live like a student for ALL 4 YEARS. This is the path of success.

Great advice👍. Continue to live like a student for the next 3-4 years after graduation (just like people who choose to specialize after dental school). Move to Texas to make as much as you can and to pay back student loans as fast as you can. Hopefully by the the time Texas becomes saturated like CA, you already finish paying off your student loans.

 

[DMDWANNABEE]

Government bailout via PSLF

I did not realize there was a way to receive the forgiveness tax-free.

Do public sector jobs pay anything? If so, this is a painfully easy way to bleed the system. 👎

Of course, you may have to live in the middle of nowhere for a decade....

 

[cmcner]

I did not realize there was a way to receive the forgiveness tax-free.

Do public sector jobs pay anything? If so, this is a painfully easy way to bleed the system. 👎

Of course, you may have to live in the middle of nowhere for a decade....

You can live anywhere you want with PSLF. You just have to work for a non-profit or the govt, you don't even have to do dentistry. I don't see how it bleeds the system any more than the military, you have a 10 years obligation with PSLF while paying 10-15% of your salary for 10 years and it's only 4 years of service for loan forgiveness with no payments in the military. With PSLF however, you have no commitment and you can just get out of the program and not get any loan forgiveness if you choose not to complete the 10 years and move forward with IBR alone.

It is a matter of time when the "IBR" bubble will burst. It is a scary thought when people are planning their educational futures around getting a student loan bailout.

Word of the wiser: go to the least expensive school you are able to get into, take out the least amount of loans to live on, and live like a student for ALL 4 YEARS. This is the path of success.

I know student loans are a bubble, but I personally do not feel IBR is a bubble, it shouldn't really cost the government money most of the time. There is no other program in the country as suited for IBR as high priced dental schools. Most people graduating college will have $100K or less in student loans, not $500K like us. If they average $50,000+ in salary over their first 20 years of work they'll pay their principle off making IBR neutral in those situations and profitable in anyone who averages over $50,000. Also anyone who ever makes $100,000 will hit that program ceiling (discussed earlier) since their original principle was $100,000 and have all of that delayed interest move onto their principle with negative amortization increasing profit for the government. Finally if they do have loans forgiven, the government will get at least 35% of that forgiven portion back in income tax revenue, most of which will likely be forgiven interest meaning it's even more likely people will pay the government for their principles at least one way or another. Basically you need the average population to have a HUGE debt or an absurdly low salary average over 20 years for IBR to be a bubble. Student loans, well that's a who different story.

 

[mike3kgt]

Finally if they do have loans forgiven, the government will get at least 35% of that forgiven portion back in income tax revenue, most of which will likely be forgiven interest meaning it's even more likely people will pay the government for their principles at least one way or another. Basically you need the average population to have a HUGE debt or an absurdly low salary average over 20 years for IBR to be a bubble. Student loans, well that's a who different story.

This was a very good post with well-thought out discussion. I look back at 2003-2006 and was told by every expert in the business that home purchase was a great investment strategy and "a sure thing" and "never have depreciated significantly over time". I was conned into thinking that I could buy my condo for dental school and sell it my senior year to live "rent-free" during this time. Then everything changed... boy did I learn a lesson there.

Nothing is a sure thing. This is no exception.

 

[hellopeople]

You can live anywhere you want with PSLF. You just have to work for a non-profit or the govt, you don't even have to do dentistry. I don't see how it bleeds the system any more than the military, you have a 10 years obligation with PSLF while paying 10-15% of your salary for 10 years and it's only 4 years of service for loan forgiveness with no payments in the military. With PSLF however, you have no commitment and you can just get out of the program and not get any loan forgiveness if you choose not to complete the 10 years and move forward with IBR alone.


I know student loans are a bubble, but I personally do not feel IBR is a bubble, it shouldn't really cost the government money most of the time. There is no other program in the country as suited for IBR as high priced dental schools. Most people graduating college will have $100K or less in student loans, not $500K like us. If they average $50,000+ in salary over their first 20 years of work they'll pay their principle off making IBR neutral in those situations and profitable in anyone who averages over $50,000. Also anyone who ever makes $100,000 will hit that program ceiling (discussed earlier) since their original principle was $100,000 and have all of that delayed interest move onto their principle with negative amortization increasing profit for the government. Finally if they do have loans forgiven, the government will get at least 35% of that forgiven portion back in income tax revenue, most of which will likely be forgiven interest meaning it's even more likely people will pay the government for their principles at least one way or another. Basically you need the average population to have a HUGE debt or an absurdly low salary average over 20 years for IBR to be a bubble. Student loans, well that's a who different story.

I may be wrong, but I'm pretty sure the military carries out HPSP as a way to reduce overall cost. I wouldn't call it a way to "bleed the system" (Completely ignoring for a moment that a military commitment is a bit more than a financing option).

Don't know much about IBR, but if a dentist is going to be providing low-cost dentistry to those who can't pay regular rates for an entire decade, I feel like the government is going to get their money's worth out of that person regardless of the amount of forgiven debt. So I can't really see much of a problem with IBR either.

 

[yappy]

With the political polarization of our country, the financial uncertainty, I would not bank my whole future on IBR. I would plan on having to pay the whole thing back when making my decision to go to dental school or not. That way you're prepaired for what ever takes place. I agree that it will most likley endure but you never know.

Given the choice - I would never use IBR as an excuse to go to a more expensive school. HPSP seems safer because you receive a commitment on the front end and military benfits are alot less political than student loans.

On a side note: It cracks me up to listen to baby boomers complain about things like IBR and sub loans. As if their tuition wasnt almost completely covered by the state! lol.

The "me - generation" had it so good for so long. They were born on third base but thought they hit a triple. It's nice to see them bleed a little as they get close to retirement

 

[DMDWANNABEE]

You can live anywhere you want with PSLF. You just have to work for a non-profit or the govt, you don't even have to do dentistry. I don't see how it bleeds the system any more than the military, you have a 10 years obligation with PSLF while paying 10-15% of your salary for 10 years and it's only 4 years of service for loan forgiveness with no payments in the military. With PSLF however, you have no commitment and you can just get out of the program and not get any loan forgiveness if you choose not to complete the 10 years and move forward with IBR alone.


I know student loans are a bubble, but I personally do not feel IBR is a bubble, it shouldn't really cost the government money most of the time. There is no other program in the country as suited for IBR as high priced dental schools. Most people graduating college will have $100K or less in student loans, not $500K like us. If they average $50,000+ in salary over their first 20 years of work they'll pay their principle off making IBR neutral in those situations and profitable in anyone who averages over $50,000. Also anyone who ever makes $100,000 will hit that program ceiling (discussed earlier) since their original principle was $100,000 and have all of that delayed interest move onto their principle with negative amortization increasing profit for the government. Finally if they do have loans forgiven, the government will get at least 35% of that forgiven portion back in income tax revenue, most of which will likely be forgiven interest meaning it's even more likely people will pay the government for their principles at least one way or another. Basically you need the average population to have a HUGE debt or an absurdly low salary average over 20 years for IBR to be a bubble. Student loans, well that's a who different story.

Because we were talking about someone purposefully taking on additional loans so that they could increase their income potential based on IBR rules, my first thought was of ppl playing the system.

With the political polarization of our country, the financial uncertainty, I would not bank my whole future on IBR. I would plan on having to pay the whole thing back when making my decision to go to dental school or not. That way you're prepaired for what ever takes place. I agree that it will most likley endure but you never know.

Given the choice - I would never use IBR as an excuse to go to a more expensive school. HPSP seems safer because you receive a commitment on the front end and military benfits are alot less political than student loans.

On a side note: It cracks me up to listen to baby boomers complain about things like IBR and sub loans. As if their tuition wasnt almost completely covered by the state! lol.

The "me - generation" had it so good for so long. They were born on third base but thought they hit a triple. It's nice to see them bleed a little as they get close to retirement

Cold dude

 

[mr24]

With the political polarization of our country, the financial uncertainty, I would not bank my whole future on IBR. I would plan on having to pay the whole thing back when making my decision to go to dental school or not. That way you're prepaired for what ever takes place. I agree that it will most likley endure but you never know.

Given the choice - I would never use IBR as an excuse to go to a more expensive school. HPSP seems safer because you receive a commitment on the front end and military benfits are alot less political than student loans.

On a side note: It cracks me up to listen to baby boomers complain about things like IBR and sub loans. As if their tuition wasnt almost completely covered by the state! lol.

The "me - generation" had it so good for so long. They were born on third base but thought they hit a triple. It's nice to see them bleed a little as they get close to retirement

Not me! id rather them not bleed so they can retire early, which mean less competition for me, so i can be more successful more quickly. haha

 

[mike3kgt]

Not me! id rather them not bleed so they can retire early, which mean less competition for me, so i can be more successful more quickly. haha

This is exactly the type of person who I resent calling a colleague.

Not that I don't also think that the baby boom generation has had their good and bad effect upon society but, remember, some young sprout will be saying the same thing about you when you turn 60. Positive competition is a good thing and can focus us, but calling out a group of people hoping they will "bleed" is just downright inappropriate.

 

[mr24]

This is exactly the type of person who I resent calling a colleague.

Not that I don't also think that the baby boom generation has had their good and bad effect upon society but, remember, some young sprout will be saying the same thing about you when you turn 60. Positive competition is a good thing and can focus us, but calling out a group of people hoping they will "bleed" is just downright inappropriate.

Re-read what i wrote! i said i would rather they NOT bleed!!!!! Meaning i hope they can retire when they were planning. also i added some haha's at the end meaning this statement (about being more successful more quickly) was mostly a joke. but if you dont want to consider me a colleague thats fine by me. just remember, you dont even know who i am, or what im about. but you probably gathered all that you needed to know about me by a one sentence joke. 👍

 

[cmcner]

With the political polarization of our country, the financial uncertainty, I would not bank my whole future on IBR. I would plan on having to pay the whole thing back when making my decision to go to dental school or not. That way you're prepaired for what ever takes place. I agree that it will most likley endure but you never know.

Given the choice - I would never use IBR as an excuse to go to a more expensive school. HPSP seems safer because you receive a commitment on the front end and military benfits are alot less political than student loans.

On a side note: It cracks me up to listen to baby boomers complain about things like IBR and sub loans. As if their tuition wasnt almost completely covered by the state! lol.

The "me - generation" had it so good for so long. They were born on third base but thought they hit a triple. It's nice to see them bleed a little as they get close to retirement

I don't think this is a very risky program based on political polarization because Bush passed the law in 2007 as a Republican, then Obama said he'd embraced and modified the program in 2011 to make it his own as a Democrat. So both parties were part of making this law which was a bigger law than just IBR so it would likely take repealing the entire law to void this small part. If it does fail you'll be able to pay it off, it will just be hard but if high debt or rejecting an acceptance is you're only choice, I feel it's not even close, take the risk with the high debt and hope these programs last, which is the likely outcome. Even if they take them away the people in them will likely be grandfathered in.

Because we were talking about someone purposefully taking on additional loans so that they could increase their income potential based on IBR rules, my first thought was of ppl playing the system.



Cold dude

I consider it more using a system that I'm paying into. I'm likely going to pay well over a million dollars in income taxes through out my life, I may as well enjoy the services that my tax dollars pay for. I'm never going to see social security or medicare/medicaid, welfare and unemployment isn't super likely, and I'm hopefully not going to take advantage of my money that goes to federal prison, this seems like a good option. I'm still going to end up paying more in than I get out in the end.

 

[mike3kgt]

Re-read what i wrote! i said i would rather they NOT bleed!!!!! Meaning i hope they can retire when they were planning. also i added some haha's at the end meaning this statement (about being more successful more quickly) was mostly a joke. but if you dont want to consider me a colleague thats fine by me. just remember, you dont even know who i am, or what im about. but you probably gathered all that you needed to know about me by a one sentence joke. 👍

That was one small "t".

I just see so many young grads who are so aggressive, and often rightly so because they have to pay off $400k+ in loans, that they forget that we are all in this together as colleagues, rather competitors.

 

[McKnightRider]

So i'm a resident for the next 3 years and I'm in deferment. During which the govt pays the interest on my subsidized loans.

But I'm sitting on 300k in student loans from a 2011 graduation which will probably reach upwards of 350k by the time i'm out. When I finish residency and get my first job I should start at 250k (maybe a little higher)...I assume this will preclude me from taking IBR and I will also get hit with the interest that the government paid?

anyone able to explain this...money stuff is not my strong suit 😀

 

[cmcner]

So i'm a resident for the next 3 years and I'm in deferment. During which the govt pays the interest on my subsidized loans.

But I'm sitting on 300k in student loans from a 2011 graduation which will probably reach upwards of 350k by the time i'm out. When I finish residency and get my first job I should start at 250k (maybe a little higher)...I assume this will preclude me from taking IBR and I will also get hit with the interest that the government paid?

anyone able to explain this...money stuff is not my strong suit 😀

If you start at $250,000 and stay at that you will be paying $25,000 a year with IBR assuming you have federal loans in 2012 which is the qualifier for 10% 20 years IBR, if your last federal loan came between the years of 2009 and 2011 you'd be in the 15% for 25 years group which would make your annual payment $37,500 per year, either of which would more than enough to cover your principle so IBR likely won't provide any long term benefits for you as your loans should be paid off in 10-15 years with IBR and not qualify for forgiveness. However, IBR might be good if you have a rough time starting out and need low payments for a few months before you get on your feet. If your IBR payment is higher than what it would take to pay it back as a 25 or 20 year loan then you won't be hurt or helped by IBR, it would just be another form of payment. You may actually end up paying more monthly than you would for a 25 year standard repayment, but your loans would be paid off before 25 years in that situation and you will have ended up paying less interest with IBR

 

[DMDWANNABEE]

I don't think this is a very risky program based on political polarization because Bush passed the law in 2007 as a Republican, then Obama said he'd embraced and modified the program in 2011 to make it his own as a Democrat. So both parties were part of making this law which was a bigger law than just IBR so it would likely take repealing the entire law to void this small part. If it does fail you'll be able to pay it off, it will just be hard but if high debt or rejecting an acceptance is you're only choice, I feel it's not even close, take the risk with the high debt and hope these programs last, which is the likely outcome. Even if they take them away the people in them will likely be grandfathered in.


[COLOR="Red"]I consider it more using a system that I'm paying into. I'm likely going to pay well over a million dollars in income taxes through out my life, I may as well enjoy the services that my tax dollars pay for. I'm never going to see social security or medicare/medicaid, welfare and unemployment isn't super likely, and I'm hopefully not going to take advantage of my money that goes to federal prison, this seems like a good option. I'm still going to end up paying more in than I get out in the end.[/COLOR]

Say I decide to never marry my fiance and have her officially "live at her parents house" so that when we have a child, we (she) can collect food stamps while I work as a dentist : I could use the same argument.

Using IBR this way isn't illegal, so the situation is quite a bit different. But I still don't have the right to take that money just because my lucrative job causes me to pay higher taxes.

It looks like this idea only works if the majority of the people using IBR are using it responsibly. Those in the program that made choices that led them to eventually pay back their loans, subsidize those who choose not to.

I'm sorry, but if intentionally running your debt as high as possible becomes a reasonable way to protect yourself from it, something is wrong with what's happening.

 

[DMDWANNABEE]

Maybe I'm getting worked up over nothing though. I still don't know what kind of job you would need to do to qualify for tax-free forgiveness. Maybe I should have looked it over before I got into this.

Looks like the schools make out well, doesn't it? Lots of income from people who think they will never actually pay the cost themselves and I assume quite an influx of interested potential instructors looking for a suitable non-profit.

 

[TeethAreUs]

Maybe I'm getting worked up over nothing though. I still don't know what kind of job you would need to do to qualify for tax-free forgiveness. Maybe I should have looked it over before I got into this.

Looks like the schools make out well, doesn't it? Lots of income from people who think they will never actually pay the cost themselves and I assume quite an influx of interested potential instructors looking for a suitable non-profit.

I was thinking if I do well in dental school, maybe go OMFS and work for a hospital, or work for a prison, or a public clinic.

 

[cmcner]

Say I decide to never marry my fiance and have her officially "live at her parents house" so that when we have a child, we (she) can collect food stamps while I work as a dentist : I could use the same argument.

Using IBR this way isn't illegal, so the situation is quite a bit different. But I still don't have the right to take that money just because my lucrative job causes me to pay higher taxes.

It looks like this idea only works if the majority of the people using IBR are using it responsibly. Those in the program that made choices that led them to eventually pay back their loans, subsidize those who choose not to.

I'm sorry, but if intentionally running your debt as high as possible becomes a reasonable way to protect yourself from it, something is wrong with what's happening.

I didn't have financially diverse options when I chose my school, well actually I did, it was wait a year and hope my medium sized state school that didn't even interview me this year or the year before would give me a chance next year while risking my career all together, or take on a bunch of debt and figure it out knowing I'd come out a dentist. I chose the second option and in doing so found this plan, and found it's a very appealing plan, and I may actually do better financially with it than if I had gotten into my much cheaper state school. However, I wouldn't suggest to someone who gets into two schools they find equally good to go the the vastly more expensive one to try this out, go the cheap route and play it safe, but if your options are really expensive and only vary by a few ten's of thousand, going the more expensive route and maxing out will actually put you in a better situation in the long run, assuming these forgiveness programs last and you understand them completely. Also it may be an option if you greatly prefer a great expensive school over a sub-par cheap school, however there is financial uncertainty at the end. And if you choose PSLF you will be bound and constricted by the rules of the program for 10 years if you want any benefits.

The intent for me was not to bleed the system, it was to survive and hopefully thrive in a broken system that is US Higher Education.

 

[Sublimazing]

I was thinking if I do well in dental school, maybe go OMFS and work for a hospital, or work for a prison, or a public clinic.

yes...be sure to post here when that plan comes to fruition.

 

[DMDWANNABEE]

I didn't have financially diverse options when I chose my school, well actually I did, it was wait a year and hope my medium sized state school that didn't even interview me this year or the year before would give me a chance next year while risking my career all together, or take on a bunch of debt and figure it out knowing I'd come out a dentist.

There are more than two options for someone rejected from their in-state school.

I chose the second option and in doing so found this plan, and found it's a very appealing plan, and I may actually do better financially with it than if I had gotten into my much cheaper state school.

Perhaps you will, but there would be a reason for this. No?

However, I wouldn't suggest to someone who gets into two schools they find equally good to go the the vastly more expensive one to try this out, go the cheap route and play it safe, but if your options are really expensive and only vary by a few ten's of thousand, going the more expensive route and maxing out will actually put you in a better situation in the long run, assuming these forgiveness programs last and you understand them completely. Also it may be an option if you greatly prefer a great expensive school over a sub-par cheap school, however there is financial uncertainty at the end. And if you choose PSLF you will be bound and constricted by the rules of the program for 10 years if you want any benefits.

The intent for me was not to bleed the system, it was to survive and hopefully thrive in a broken system that is US Higher Education.

You aren't trying to survive anything. You are trying to enter the upper middle class. (Or perhaps dentistry just sounds fun to you, in which case you are trying to find a comfortable career).

You don't need to defend your decision to anyone, but don't act as if this is your only choice. Dentistry is a business, and business can be cutthroat and less that scrupulous. I get it. No worries.

It's not my path to take, but its not really my path to judge either.



I feel like I'm dancing on my soapbox over here. I apologize to everyone, but irresponsible use of tax dollars irks me.

 

[JMBerry789]

Every thread I read about IBR on various forums people always talk about the risk of loosing it. Here's why I think IBR will not go away:

1) If you did default on your student loans, the max they can take is 15% of your income.... So why if your already paying 15% of your income on IBR, would they take it away just to sue you and pay debt collectors(up to 10-20% of your balance which is stupidly high) to come after you to get 15% of your pay check? Doesn't make sense to me...

2) It would be political suicide to do so, when it is making them money. Think about it this way. Person A has $120,000 in outstanding student loans and he makes about $50,000 (assuming you make 50,000 per year forever which is not realistic but it'll do for our purposes) per year. They take (50,000 - 11,000) x .15 = 5,850 from you per year x 25 years = $146,250... Also assuming you have lots of assets, your balance at the end of 25 years would be $177,750 x .35 (assuming 35% tax rate) = 62,212.50.... 62,212.50 + 146,250 = $208,462.50 they would collect from you totally. If we take today's interest rates of say 3% and bring that back to present value = $100,000... That is assuming! You make $50,000 per year for the next 25 years. As you can see, the government will get their money back in two ways... One your paying more in federal taxes by making higher $$ and your paying more back to the Government because you make more money.

As you can see, IBR is not going away

 

[DMDWANNABEE]

Every thread I read about IBR on various forums people always talk about the risk of loosing it. Here's why I think IBR will not go away:

1) If you did default on your student loans, the max they can take is 15% of your income.... So why if your already paying 15% of your income on IBR, would they take it away just to sue you and pay debt collectors(up to 10-20% of your balance which is stupidly high) to come after you to get 15% of your pay check? Doesn't make sense to me...

2) It would be political suicide to do so, when it is making them money. Think about it this way. Person A has $120,000 in outstanding student loans and he makes about $50,000 (assuming you make 50,000 per year forever which is not realistic but it'll do for our purposes) per year. They take (50,000 - 11,000) x .15 = 5,850 from you per year x 25 years = $146,250... Also assuming you have lots of assets, your balance at the end of 25 years would be $177,750 x .35 (assuming 35% tax rate) = 62,212.50.... 62,212.50 + 146,250 = $208,462.50 they would collect from you totally. If we take today's interest rates of say 3% and bring that back to present value = $100,000... That is assuming! You make $50,000 per year for the next 25 years. As you can see, the government will get their money back in two ways... One your paying more in federal taxes by making higher $$ and your paying more back to the Government because you make more money.

As you can see, IBR is not going away

I think it is much more likely that they would put a salary cap on the program or adjust the percentage of income taken so that it is progressive (like the federal income tax). In fact, I have already heard of proposals for the latter. Such a change wouldn't be politically dangerous because it wouldn't negatively affect many people. Who is going to care that the top 10% income bracket has to pay 20%-25% (which might still leave you qualifying for IBR if you have been NEG AMing for awhile) rather than 15% of their salary? Especially if that change is paired with one that allows the other 90% to pay a couple percent less?

Of course, they could also decide to consider your forgiven balance as non-taxable income rather than considering it taxable income as they do now...

There's really no way to know how they will treat the wealthier people on IBR as the program matures. Hopefully, for those professionals affected, the government plays nice.

 

[budda10000]

With the political polarization of our country, the financial uncertainty, I would not bank my whole future on IBR. I would plan on having to pay the whole thing back when making my decision to go to dental school or not. That way you're prepaired for what ever takes place. I agree that it will most likley endure but you never know.

Given the choice - I would never use IBR as an excuse to go to a more expensive school. HPSP seems safer because you receive a commitment on the front end and military benfits are alot less political than student loans.

On a side note: It cracks me up to listen to baby boomers complain about things like IBR and sub loans. As if their tuition wasnt almost completely covered by the state! lol.

The "me - generation" had it so good for so long. They were born on third base but thought they hit a triple. It's nice to see them bleed a little as they get close to retirement

Your right, they did not have to worry about financial debt so much. Instead their motivating factor for excelling in school was not to get shipped off to vietnam and get blown to pieces.
Ill take the debt thankyou.
FYI my father's friend stepped on a land mine and got agent orange exposure yet still made a damn good physician. But hey no college debt! 👍