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Regarding subsidized loans has anyone figured out what the bolded text is supposed to mean?
How do we know if the "reduced payment" covers the interest or not?
Does this mean if your calculated IBR monthly payment is so low (ie. $0) then the govt will pay the interest (up to 3 yrs)?
So if your payment is around $300/month then you're just outta luck - ie. you'll be paying interest until it's all paid off?
http://www.ibrinfo.org/faq.vp.html#_How_does_IBR_ said:How does IBR treat interest? Does it still accrue?
If your reduced payment under IBR does not cover the interest on your loans, the government will pay that interest on your Subsidized Stafford Loans during your first three years in IBR. After three years, and for all other loan types, the interest will accrue but not compound. That means it will be added to your principal, but interest will continue to accrue only on the original principal amount. Anything you still owe after 25 years of qualifying payments will be forgiven.
How do we know if the "reduced payment" covers the interest or not?
Does this mean if your calculated IBR monthly payment is so low (ie. $0) then the govt will pay the interest (up to 3 yrs)?
So if your payment is around $300/month then you're just outta luck - ie. you'll be paying interest until it's all paid off?