Ibr

[Lisochka]

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So, I just called the consolidation department and she told me that I dont qualify for an income based repayment plan because I make 110-115K per year. I told her that I owe 250K in student loans. Sha tole me that with family size of 2 and family income of 110K-115K I wont qualify...It makes no sense.
I have single friends who qualified for an IBR...
If you are on IBR plan,
1) what are you family size?
2) How much you owe?
3) what are you making?

 

[FlavyFlav]

So, I just called the consolidation department and she told me that I dont qualify for an income based repayment plan because I make 110-115K per year. I told her that I owe 250K in student loans. Sha tole me that with family size of 2 and family income of 110K-115K I wont qualify...It makes no sense.
I have single friends who qualified for an IBR...
If you are on IBR plan,
1) what are you family size?
2) How much you owe?
3) what are you making?

You qualify according to the official site. I put in all the information you just gave and the calculator gave me a payment of <$1200 a month. I think you need to go look at this site, and then talk to someone else about applying for IBR if you think that's the loan payment plan for you.

I just want to make sure that your wife doesn't generate an income, and that all your loans are federal loans and nothing is private. Because the only way I see you wouldn't qualify is if one of these is true and your IBR payment would be greater than the 10 year payment amount for your federal loans.

 

[confettiflyer]

This doesn't make sense, you should qualify. Turn in the paperwork anyway and see what happens. Your gross income may be $110-$115 but the actual income used to calculate your IBR payment is different (adjusted gross income).

 

[spacecowgirl]

Is all of the 250K federal loans?

 

[grap112ler]

she doesn't know what she's talking about

 

[All4MyDaughter]

A friend of mine called to see about switching to IBR. She was told her payment would be $2700 per month, which is way higher than it already is (she is currently on the standard repayment plan). An IBR payment of $2700 would be equivalent to an AGI of $216,000 (if my math is correct). Plus IBR payments are never higher than the standard repayment plan. I think the people you get to talk to when you call in don't always know what they are talking about.

 

[Alby]

From my understanding, you have to apply for IBR immediately when you graduate so that your previous tax returns have an annual income that qualifies. Once you are in the IBR program, you stay in, but you can't qualify when you are making a real pharmacists salary. This is my understanding; I do not claim to be an expert. This is the information my SO received from his financial advisor.

 

[confettiflyer]

From my understanding, you have to apply for IBR immediately when you graduate so that your previous tax returns have an annual income that qualifies. Once you are in the IBR program, you stay in, but you can't qualify when you are making a real pharmacists salary. This is my understanding; I do not claim to be an expert. This is the information my SO received from his financial advisor.

Salary alone does not determine qualification for IBR, the balance of the loan comes into play (which determines the payment).

Crazy example: if you make $500,000 a year, but you have a $50M student loan....then yes you qualify for IBR. Nevermind you make 500k a year, the payment on a $50M student loan would be something like ~$600k/month.

 

[BMBiology]

From my understanding, you have to apply for IBR immediately when you graduate so that your previous tax returns have an annual income that qualifies. Once you are in the IBR program, you stay in, but you can't qualify when you are making a real pharmacists salary. This is my understanding; I do not claim to be an expert. This is the information my SO received from his financial advisor.

That's my concern about IBR. It's too confusing and people make too many rosy assumptions that end up costing them a lot of money in the long run.

If anyone who is interested in IBR or PAYE, call the department of education directly. Get answers from them.

 

[FlavyFlav]

That's my concern about IBR. It's too confusing and people make too many rosy assumptions that end up costing them a lot of money in the long run.

If anyone who is interested in IBR or PAYE, call the department of education directly. Get answers from them.

On paper, it's not confusing, but I imagine people who are brokering the loans don't want people to get a break so easily. So, why should they try to get you on a beneficial payment plan?

For me, IBR works out to be cheaper in interest (even considering the tax payment I will have in 25 years) than the 10 year pay off. Of course, everyone's situation will be different. You also have to consider that this program updates yearly and who's to say it will even be available in 10 years.. or even next year? That's the scary part, but really, at this time I'm choosing IBR until I can at least pay everything else off that I have.

 

[BMBiology]

On paper, it's not confusing, but I imagine people who are brokering the loans don't want people to get a break so easily. So, why should they try to get you on a beneficial payment plan?

For me, IBR works out to be cheaper in interest (even considering the tax payment I will have in 25 years) than the 10 year pay off. Of course, everyone's situation will be different. You also have to consider that this program updates yearly and who's to say it will even be available in 10 years.. or even next year? That's the scary part, but really, at this time I'm choosing IBR until I can at least pay everything else off that I have.

I don't see how the 25-year IBR is cheaper than the 10-year repayment, assuming you are working full-time as a pharmacist, can afford the 10 year plan and don't have other debt like credit card debt.

I guess everyone is different and some people need to be on IBR. That's fine but you will end up paying more with the 25 year IBR than 10 year repayment.

 

[confettiflyer]

I don't see how the 25-year IBR is cheaper than the 10-year repayment, assuming you are working full-time as a pharmacist, can afford the 10 year plan and don't have other debt like credit card debt.

I guess everyone is different and some people need to be on IBR. That's fine but you will end up paying more with the 25 year IBR than 10 year repayment.

He mentioned "tax payment" in his reply so I assume he's talking about loan forgiveness at the end of 25. But you are right his income will rise so high (despite you/others being bearish on pharm salaries) that there won't be much to forgive after 25 years anyway. Forget about it if he marries and the spouse works/earns money, he'll by default be paying the 10yr amortization.

So yes 25 yr vs. 10 yr is like comparing a 30 yr to a 15 yr mortgage.

 

[FlavyFlav]

He mentioned "tax payment" in his reply so I assume he's talking about loan forgiveness at the end of 25. But you are right his income will rise so high (despite you/others being bearish on pharm salaries) that there won't be much to forgive after 25 years anyway. Forget about it if he marries and the spouse works/earns money, he'll by default be paying the 10yr amortization.

So yes 25 yr vs. 10 yr is like comparing a 30 yr to a 15 yr mortgage.

Well, it's a huge loan debt to start with, and yes with loan forgiveness it works out to about 40k less on the final payoff. But you're right, this is assuming my salary stays stagnant over the 25 years. However, if it does rise substantially, I can always reevaluate my financial situation and go for the best options presented to me at that point. Plus, at the moment, we are a single income family with a child. Point being, each person needs to crunch the numbers as relevant for their personal situation to decide what will work out best for them.

 

[grumps]

It is simply criminal what has been done to you kids. These debt loads are just heartbreaking. You already have an odious mortgage coming out of school.

 

[PreciousThings9]

Does your spouse's income only factor in if you file a joint return?

 

[confettiflyer]

Well, it's a huge loan debt to start with, and yes with loan forgiveness it works out to about 40k less on the final payoff. But you're right, this is assuming my salary stays stagnant over the 25 years. However, if it does rise substantially, I can always reevaluate my financial situation and go for the best options presented to me at that point. Plus, at the moment, we are a single income family with a child. Point being, each person needs to crunch the numbers as relevant for their personal situation to decide what will work out best for them.

Agreed (bolded for emphasis). If you marry a debt free pharmacist you'll have absolutely zero to pay off in 25 years.

 

[Sparda29]

I wonder if it would be cheaper to just pay the minimum every month, and let the debt die with you. With IBR, I still gotta pay like $800/month.