Income based loan forgiveness programs

Started by mangler
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M

mangler

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Are these options worth considering for most people? Are you likely to actually save money?
 
mangler said:
Are these options worth considering for most people? Are you likely to actually save money?
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Your goal should not be to reach forgiveness on the income-based plans. If you do, you'll a) owe tax on the portion of your loan balance that is forgiven and b) not have made enough money over your lifetime to pay off the loans, which is a huge red flag that you overborrowed. The forgiveness aspect of IBR, PAYE, etc.is intended to relieve those borrowers who will clearly never be able to pay off their loans. It's the government's way of saying "oh **** you've been making loan payments for 25 years and haven't paid off your loans? That sucks, we're wiping away the balance." The income-based plans should be used only when necessary, and not as a means of reaching forgiveness.
 
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