what do most people do for loan repayment?

[badasshairday]

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I will be 200K+ in debt and finishing med school in a few months. I was thinking about doing traditional repayment because my significant other will be making a pretty good income and I don't think IBR will be good for me (esp because I am likely not going to be at a public service type of place). Those loan calculators are crazy though because I will owe like 1300$ a month or so for 30 years if I go the traditional route. I definitely do not want to forebear and have my loans balloon over the 6 years of post graduate training that I will be doing (rads residency + fellowship). Can I just pay off my interest if I forbear? At least until I become an attending? 🙁

 

[redtomate]

If your S.O. is paying your living expenses, and assuming your loans are at a terrible interest rate (3% or greater), I'd pay the loans down as fast as possible. Put your whole salary into it.

On the other hand, I wouldn't worry too much about it since the government is going to have to step in and bail out the student loans, they are just out of control. I wouldn't be surprised to see your debt just forgiven entirely in the next 5 years.

 

[Dirt]

On the other hand, I wouldn't worry too much about it since the government is going to have to step in and bail out the student loans, they are just out of control. I wouldn't be surprised to see your debt just forgiven entirely in the next 5 years.

You, my friend, are a total nut bag if you think that is going to happen.

To the OP, I couldn't begin to help you without knowing specific details about your financial situation. Forbearance is definitely not a good idea though. I would think long and hard about doing IBR. There are a number of benefits beyond the public service loan forgiveness program. For example.

INTEREST PAYMENT BENEFIT: If your monthly IBR payment amount does not cover the interest that accrues on your loans each month, the government will pay your unpaid accrued interest on your Subsidized Stafford Loans (either Direct Loan or FFEL) for up to three consecutive years from the date you began repaying your loans under IBR.

I am not sure but you also may be allowed to pay a bit more than your calculated amount to cover interest if you can afford it.

 

[redtomate]

You, my friend, are a total nut bag if you think that is going to happen.

To the OP, I couldn't begin to help you without knowing specific details about your financial situation. Forbearance is definitely not a good idea though. I would think long and hard about doing IBR. There are a number of benefits beyond the public service loan forgiveness program. For example.



I am not sure but you also may be allowed to pay a bit more than your calculated amount to cover interest if you can afford it.

Of course I'm half-kidding. That said, I think there's a better than 50-50 chance SOME sort of aid will come to student debt in the next 5 years.

 

[badasshairday]

To the OP, I couldn't begin to help you without knowing specific details about your financial situation. Forbearance is definitely not a good idea though. I would think long and hard about doing IBR. There are a number of benefits beyond the public service loan forgiveness program. For example.

I will be starting internship this summer and my significant other will start her first job later this year (starting pay >70-80K). We plan to marry either this summer or in the fall of this year. So if I combine my salary with her's we are ~110K combined gross income. This probably makes IBR worthless at that high of a salary based on the formula I have seen:

[(gross income of you + spouse) - federal poverty level] x 15% = IBR for the year

($110,000 - $10,600) x 15% = $14,910

$14,910 / 12 months = $1,242 per month

Is this about right?

 

[DrBowtie]

I will be starting internship this summer and my significant other will start her first job later this year (starting pay >70-80K). We plan to marry either this summer or in the fall of this year. So if I combine my salary with her's we are ~110K combined gross income. This probably makes IBR worthless at that high of a salary based on the formula I have seen:

[(gross income of you + spouse) - federal poverty level] x 15% = IBR for the year

($110,000 - $10,600) x 15% = $14,910

$14,910 / 12 months = $1,242 per month

Is this about right?

Not an expert, but I believe you can file separately and get the IBR benefit.

Need to start gathering up all of my financial data to get a handle on all of this myself.

 

[Dirt]

For one you are using your total gross income, your adjusted gross income should be a fair amount lower.

Even assuming your payment is $1000/month are you saying that is too much?

An income of $110K for two people is quite a bit of money. The whole point of IBR is that it gives you a payment that you should be able to comfortably afford.

In addition you could just file separately and then it would be based only on your income.

 

[badasshairday]

For one you are using your total gross income, your adjusted gross income should be a fair amount lower.

Even assuming your payment is $1000/month are you saying that is too much?

An income of $110K for two people is quite a bit of money. The whole point of IBR is that it gives you a payment that you should be able to comfortably afford.

In addition you could just file separately and then it would be based only on your income.

Right. But when you have a 1000$/month payment plus a 1400$ a month just for rent of a regular apartment, it gets tricky. Plus I don't want her to have to worry about my loans, lol. I guess it will be fine, i'm just trying to get my finances all straightened out as graduation approaches.

 

[freaker]

It's worth it to go into income based repayment just to avoid the capitalization of your interest. Otherwise, your accumulating interest is treated as principle and you begin accumulating interest on your interest. That alone is reason enough to go into IBR. Now, if you're already paying more than your interest is accumulating, good for you. This matters less. But keep in mind that with 200k in loans at 6.8%, you're accumulating interest at the rate of more than 13k per year.

Definitely don't go into forbearance unless you have to.

 

[DrVanNostran]

My significant other and I will probably hit a combined income of around 80-90K next year. From what I am reading, it is probably beneficial to file separately correct??

Also, if we are in IBR, can we pay EXTRA to knock down the principal??

 

[DrVanNostran]

Also, is it possible to consolidate Nelnet+Direct Loans + Sallie Mae to get one IBR payment, or will I have 3 payments?

 

[badasshairday]

My significant other and I will probably hit a combined income of around 80-90K next year. From what I am reading, it is probably beneficial to file separately correct??

Also, if we are in IBR, can we pay EXTRA to knock down the principal??

I know you can file seperately, is she also going to be a resident? For me it definitely will be beneficial to file seperately because my SO will be making significantly more than me.

Yes you can pay extra, you just have to specify it in writing that you want that extra to go to the principal.

 

[shantster]

Yes you can pay extra, you just have to specify it in writing that you want that extra to go to the principal.

By doing that, will you still get the rest of the interest paid for by the government? I definitely wouldn't want to pay more if I lose out on free money.

 

[badasshairday]

By doing that, will you still get the rest of the interest paid for by the government? I definitely wouldn't want to pay more if I lose out on free money.

Why not? I think doing IBR for subsidized interest + getting government paying for the uncovered subsidized interest is the point. In addition to that, you can pay extra to cover the cost of your unsubsidized interest and a little bit of principle. I don't think that would be a problem.

 

[DrMidlife]

(Side note for those playing along at home: there's no subsidized interest for med students now. It ended 7/1/12. All Staffords accrue interest all the time now.)