REPAYE 3 year interest subsidy - deferment for additional schooling?

[Lexington2012]

There is a 3 year interest subsidy for people that are under the REPAYE student loan repayment program.

I am considering getting an MBA. I will be taking 6 credits per semester, therefore my student loans will go into deferment. I am currently on the REPAYE program. Will the interest still be subsidized during this period even though I am not required to make payments?

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[ldiot]

I think they only subsidize your interest if 10% of your discretionary income is less than the interest you are incurring. In other words if you have 200k in student loans at 6% interest, that's 12k in interest a year. So if 10% of your discretionary income is less than 12k the government will pay the difference. This is presumably to prevent balances from ballooning out of control.

My understanding is that the interest subsidy is only available to those who are in active repayment, but I could be wrong.

My personal advice would be once you are working full time consolidate with a private company at a lower interest rate and pay the loan off aggressively.

 

[MindGeek]

I'm glad that you are considering an MBA, but that 3 year subsidy is only on subsidized loans during REPAYE repayment. If you are in-school you are going to get an in-school deferment. You would get the in-school subsidy on just your subsidized loans, and the 3 year REPAYE interest subsidy would start once you truly enter repayment again with the amount of months used subtracted out. Unsubsidized loans will still accrue interest in-school and during the first 3 years of repayment and beyond.

 

[BMBiology]

An MBA is a waste of money when you don't have work experience.

If retail is your faith then getting an MBA is not going to help you get out of that hell hole.


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[Amicable Angora]

An MBA is a waste of money when you don't have work experience.

If retail is your faith then getting an MBA is not going to help you get out of that hell hole.


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MBAs earned with little work experience are still valuable, but in a different way; they broaden your mind and make you aware of things that the average worker wouldn't pay attention to like little details about finance, management and marketing. Getting an MBA later on would be more helpful in making contacts

 

[BMBiology]

MBAs earned with little work experience are still valuable, but in a different way; they broaden your mind and make you aware of things that the average worker wouldn't pay attention to like little details about finance, management and marketing. Getting an MBA later on would be more helpful in making contacts

You don't need to pay $50-100 k to do that. You can learn on your own.

If you are taking more debt for something that does not help you make more money, then yes, it is a waste of time because now you will have to work more just to pay off this debt. This will prevent you from doing things you want to do in life.


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[Amicable Angora]

You don't need to pay $50-100 k to do that. You can learn on your own.

If you are taking more debt for something that does not help you make more money, then yes, it is a waste of time because now you will have to work more just to pay off this debt. This will prevent you from doing things you want to do in life.


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2 problems with that, sometimes people are unmotivated by themselves and sometimes thy don't know what to learn. But I agree 50 to 100k is too much without work experience

 

[BMBiology]

2 problems with that, sometimes people are unmotivated by themselves and sometimes thy don't know what to learn. But I agree 50 to 100k is too much without work experience

If you are not motivated then that is another reason why you shouldn't be doing a graduate business program. You do not have what it takes to be successful in the business world.

Anybody..and I mean anybody can enroll into one of these programs. So how are you going to differentiate yourself from Joe Blow who doesn't know what he wants to do with his life?

This mentality is also the same reason why so many students make the mistake of going to pharmacy school. A degree doesn't mean much when everybody can just get it. It is supply vs demand. You don't need to go to business school to understand this.


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