Income based repayment unrealistic

[smiller]

I'm no longer in forbearance, but there is no way I can afford to make the payments on my Direct Loans, even on the income based repayment plan.

I see that the form you use to check the eligibility for different options includes both AGI and gross monthly income. But it doesn't seem to matter what you put in for monthly income. Due to some unusually large bonuses last year and the fact that my wife was working then, but no longer is, our monthly income is much less than it would appear based on our AGI from 2011.

Is there any way to have them consider this instead of strictly basing the payment amount on last year's AGI?

 

I also don't see any place to provide any information about things like medical bills, other expenses, or debt payments.

 

So the bottom line is that the income based repayment amount it's showing me is far more than I can possibly afford to pay. But our AGI is also large enough that it says we are not eligible for any forbearance or deferrment.

 

Any suggestions on what to do would be helpful.

[Gwennie]

It makes complete sense that it wouldn't take into account your "other expenses and debt payments". You already have a debt that has to be repaid. You're supposed to adjust your expenses and not take out further debt. That's part of budgeting. Medical bills might receive different consideration.

[Up4anything]

It makes complete sense that it wouldn't take into account your "other expenses and debt payments". You already have a debt that has to be repaid. You're supposed to adjust your expenses and not take out further debt. That's part of budgeting. Medical bills might receive different consideration.

 

"and the fact that my wife was working then, but no longer is"

 

I hope you're not overwhelmed by all that help Gwennie gave you.

[snowpuppy]

IBR is typically the lowest payment you can hope to get.

 

It's based on your AGI but you can mitigate last year's tax return with your current paystubs and proof of wife's unemployment. However, before you do this, make sure you're not going to get an even higher payment. Your AGI may be much lower than your current circumstances due to tax write offs.

 

You can submit your YTD paystubs and proof of wife's unemployment from her former employer. They will use data matching to see if she collects unemployment benefits. The Dept is looking for a true reflection of your current income.

 

There is no provision to take into account high medical bills or other debt obligations such as cc payments or mortgage.

[johnny5]

I just went through Direct Ed Consolidation and went with IBR, I had a similar issue with a higher income last year than what I will probably have this year. I just submitted my pay stubs and short statement explaining why there was a difference. It was a non issue. I will say though that once the IBR reflected my actual income now the payment is insanely low, I am actually paying more than the minimum payment just to get ahead a bit.

 

I also have a friend that recently lost his job, he just called them and talked to them sent in some paperwork showing he was unemployed and his payment amount was lowered to like $20 a month until he is employed again.

 

Short version - you can get the IBR or ICR to be based on your current income with minimal effort. The payment then is so low there should be no reason you can't make it.

 

Also I think there is a crazy long term plan if your loan is over a certain amount that allows you to replay for 30 years or about, which also can offer a VERY low payment but the interest keeps going so it kinda sucks that way.

 

Personally I'm a huge fan of IBR because anything you have not repaid in 10 years of being on IBR gets forgiven. Granted I will have paid mine off in 6-7 on my current track, if life sucks and changes majorly its nice to know I'm getting out from under them someday as long as I keep current.

[butterflywings]

I just went through Direct Ed Consolidation and went with IBR, I had a similar issue with a higher income last year than what I will probably have this year. I just submitted my pay stubs and short statement explaining why there was a difference. It was a non issue. I will say though that once the IBR reflected my actual income now the payment is insanely low, I am actually paying more than the minimum payment just to get ahead a bit.

 

I also have a friend that recently lost his job, he just called them and talked to them sent in some paperwork showing he was unemployed and his payment amount was lowered to like $20 a month until he is employed again.

 

Short version - you can get the IBR or ICR to be based on your current income with minimal effort. The payment then is so low there should be no reason you can't make it.

 

Also I think there is a crazy long term plan if your loan is over a certain amount that allows you to replay for 30 years or about, which also can offer a VERY low payment but the interest keeps going so it kinda sucks that way.

 

Personally I'm a huge fan of IBR because anything you have not repaid in 10 years of being on IBR gets forgiven. Granted I will have paid mine off in 6-7 on my current track, if life sucks and changes majorly its nice to know I'm getting out from under them someday as long as I keep current.

 

It's 25 years, not 10 years.

[snowpuppy]

I just went through Direct Ed Consolidation and went with IBR, I had a similar issue with a higher income last year than what I will probably have this year. I just submitted my pay stubs and short statement explaining why there was a difference. It was a non issue. I will say though that once the IBR reflected my actual income now the payment is insanely low, I am actually paying more than the minimum payment just to get ahead a bit.

 

I also have a friend that recently lost his job, he just called them and talked to them sent in some paperwork showing he was unemployed and his payment amount was lowered to like $20 a month until he is employed again.

 

Short version - you can get the IBR or ICR to be based on your current income with minimal effort. The payment then is so low there should be no reason you can't make it.

 

Also I think there is a crazy long term plan if your loan is over a certain amount that allows you to replay for 30 years or about, which also can offer a VERY low payment but the interest keeps going so it kinda sucks that way.

 

Personally I'm a huge fan of IBR because anything you have not repaid in 10 years of being on IBR gets forgiven. Granted I will have paid mine off in 6-7 on my current track, if life sucks and changes majorly its nice to know I'm getting out from under them someday as long as I keep current.

 

It's 25 years, not 10 years.

 

If you qualify for Public Service Forgiveness, the balance is forgiven after 10 yrs of either IBR or ICR payments.

[johnny5]

 

It's 25 years, not 10 years.

 

If you qualify for Public Service Forgiveness, the balance is forgiven after 10 yrs of either IBR or ICR payments.

 

Right I forgot the Public Service thing was why it was 10 years for me and 25 otherwise.