What repayment plan to choose?

[Jezzielin]

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I'm about 250K in debt just about to graduate this June. I am trying to figure out what repayment plan to choose as I am consolidating my PLUS and Sallie Mae loans. I will make about 48K and my husband makes about 58K. What is better IBR? Income contingent? Extended repayment? Graduated repayment?

Does it really matter? And if so, can anyone help me choose what is best for our situation?

We have no children yet, and are looking to use most of my checks to pay off my debt. I think I would rather have lower monthly payments and just "pay extra" in case months come along when I can't make a 'fixed' large payment... Also, how do I begin in looking for deference or forbearance for my upcoming residency?

Any help out there?

 

[pem8erly]

You can't defer. That option is just simply gone.

Forbearance depends on the company that your loans are with and any qualifications they may require for that. Some will do it if you just tell them that you can't make your loans payments.

IBR is the new thing out there and is still getting fine-tuned. Right now that seems to be the best option repayment wise. It caps your maximum monthly payments at a somewhat reasonable amount so that if you can make extra payments that's great but if something comes up it's a payment that you can handle.

The one thing I would suggest is that you file an income tax return this year if you weren't planning on doing so. I believe that you can do this even with zero income. It makes life a lot easier when you apply for IBR or whatever you decide on doing because some companies just don't seem to like accepting anything else.

 

[Scrub MD]

You could forbear (no payments but all interest accrues, called mandatory residency forbearance, which means they must give it to you if you ask and you are a resident).

Or you could do IBR at 1050 (by putting your info into a IBR calculator on ibrinfo dot org)

Or you could consolidate with extended repayment and pay that. 1600 for 30 year consolidation (finaid dot org)

I would do IBR. It will make some dent in your interest and will forgive the the subsidized interest that is not paid with your payment each year. But you can only do this for 3 years. Then you should forbear.

 

[illegallysmooth]

Deferring is not an option. During residency, do IBR for all eligible loans. Pay back the highest interest loans first. Check out this little calculator for some idea of how you can manipulate your interest accumulation and repayment period with different options:

https://www.studentloan.com/repaymentcalculator/index.htm