permanent forebearance?

[cchoukal]

---

Members do not see this ad.

I just got off the phone with Uncle Sam applying for loan forebearance. I just finished 3 years of deferment (the max), but I have 1 year of residency and 1 year of fellowship ahead of me. The issue of income requirements has come up on her a couple of times, so I asked the woman on the phone a couple of questions.

1) there is no income qualification for forebearance (Something Pilot Doc has said before as well). In fact, according to the gov't, you just have to be "willing but unable to pay." "So they don't look at your tax returns?" "Nope."

2) This can apparently go on indefinitely. They renew for a year at a time, but I asked her how long this could go on for. "Indefinitely," she said. I asked, "so there's no limit? Theoretically a person could forebear until they die?" "Technically, yes. They could put a limit on it, I suppose, but right now it's unlimited."

Interesting...

 

[Pilot Doc]

There are various flavors of forbearance. My knowledge of this only extends to Internship/Residency Forbearance for which you must be a trainee. I don't know about the others.

My impression is that general forbearance is something that happens at the discretion of the lender - hence the lack of a formal limit on it.

 

[cchoukal]

I didn't tell her I was in residency (and she didn't ask). She just asked if I was having a financial hardship and unable (but willing) to pay and for how long. She just did it over the phone without a form to sign...

 

[mamitch4]

I took advantage of general forbearance for various amounts of time during the several years between my undergrad and med school. Signed up over the phone, no documentation required. They would even back-date it for me to cover missed payments. The only hitch was that interest continued to accrue-- vs. deferment when it does not.

 

[fakin' the funk]

I took advantage of general forbearance for various amounts of time during the several years between my undergrad and med school. Signed up over the phone, no documentation required. They would even back-date it for me to cover missed payments. The only hitch was that interest continued to accrue-- vs. deferment when it does not.

AFAIK, economic hardship deferment for medical school loans is over. Forbearance is the only way to postpone payments.

Besides, what's the difference when >90% of your loans are unsubsidized? Thanks a lot federal gov't 👍

 

[jetproppilot]

They'll eventually get you.

Not a path you wanna try.....think about the interest on TWO HUNDRED LARGE twenty five years from now....

"Yeah, hello doctor Cchoukal? HI its Sallie.....you know....the student loan lady?" (giggles) "I know...its funny....me in person calling a client...but I was bored today and trying to clean up some old accounts....looks like last year, which was...ummmmm lemme see....2034 you deferred again..."

"...in the twenty five years you've deferred, Doc, you've paid a total of a hundred thirty-eight dollars and twenty eight cents towards your loan..."

"As of today, you owe Sallie Mae ONE MILLION SIXHUNDRED THIRTY THREE THOUSAND DOLLARS AND FORTY SIX CENTS."

"Care to make a payment?"

 

[periopdoc]

They'll eventually get you.

Not a path you wanna try.....think about the interest on TWO HUNDRED LARGE twenty five years from now....

"Yeah, hello doctor Cchoukal? HI its Sallie.....you know....the student loan lady?" (giggles) "I know...its funny....me in person calling a client...but I was bored today and trying to clean up some old accounts....looks like last year, which was...ummmmm lemme see....2034 you deferred again..."

"...in the twenty five years you've deferred, Doc, you've paid a total of a hundred thirty-eight dollars and twenty eight cents towards your loan..."

"As of today, you owe Sallie Mae ONE MILLION SIXHUNDRED THIRTY THREE THOUSAND DOLLARS AND FORTY SIX CENTS."

"Care to make a payment?"

No Sallie, I would not like to pay.

40 years later Sallie gets a phone call.

Yes I know that he never paid more than a couple hundred dollars, but he is dead now and the terms of the loan state that the loan is forgiven in the event of the borrowers death. He left a little note for you.


Let me open it up here.


Oh yes, here we go. POD says, "Take this loan and shove it."


-pod

 

[sethco]

I always wondered about this...

Why couldn't someone just permanently "forebear" their loans?

Since student loans are forgiven upon death (but not bankruptcy), they are not passed on in the estate.

Maybe with the escalating cost of education (and thus loans), the lenders will wise up and require that you prove that you can't afford to make payments?

But, as of right now I see no reason why someone couldn't do this every year. It would suck though to have to be forced to pay off 20-30 years of unpaid interest on a 200K loan.

 

[MAC10]

Im seriously considering this ! I just looked at my statement today, my loans are locked in at a sweet 2.8% interest rate.
Are student loans considered when say..buying a house?

 

[cchoukal]

yeah, I'm at 3.75 and Jet's probably right that eventually they'll catch on, and interest would accumlate, leading to a larger bill in the end.

That said, let's say it took 5 years for them to nail me. My monthly payment is $2100. If I invested that conservatively for those 5 years (5%), I'd have $140,000, WAY more than the difference in interest over those 5 years, unless they levy some fines.

The longer it takes from them to catch me, the more of an advantage I'd be at, and if it took a REALLY long time, I'd probably die before I'd have paid it all anyway.

I mean, I'm sure I'd never actually do this, but it seems like it could work out.

 

[deleted77919]

…