Did You Know???

[305_sigma]

Hey members,

 

I wanted to share some information that may help you out about your student loans. Did you know that you can contact your student loan lender and request to be placed on an income based payment plan? Many of the lenders will not tell you about this option and only inform you of the common forbearance and deferment options. However, with an income based payment plan your monthly payments can be significantly reduced for an entire year. I requested to be placed on an income based payment plan last year as my monthly loan payment was around $350 a month. After completing a simple form that the lender sent me and providing them with a copy of my 2011 taxes my payment decreased to $0 for the entire year and reports to the CRA's as current. Another thing is if you choose this option on a consecutive basis for 25 years the loan will be forgiven. Also, the income based payment plan does not count against your allotted forbearance and deferment time. Hope this information was helpful!

[Allisson0605]

That is great .

[evapor8ted]

Yes that is IBR. PAYG is good for new students as well, as it is 10% of "disposable" income vs 15% for IBR. More people will find out about these as ED is providing incentives to services who have a larger portion of their portfolio on IBR/ICR/PAYG,

[doodlebugger]

Does anyone know if there are certain requirements for this type repayment - such as needing to actively seek a job, or something like that? Also, does anyone know what they use to determine how much your payment will be? I am not currently able to work, at least for another year, and I just graduated. I have two loans with Nelnet, and I am currently in the six month deferment period. I requested this type of repayment and I am still waiting to hear from the lender.

 

Please note one thing - at the end of 25 years, if you have never paid on it, they will take the balance including interest (I think I read on $25,000 loan balances, this could be as much as $65,000) and send you one of those forms for your taxes which will show the full amount as income for that tax year, after they write it all off.

[LvR]

No special requirements, except that IBR makes you reapply every year for the plan. Income Contingent has a higher repayment percentage on income above the poverty line, but you sign a waiver to let them get your adjusted gross income directly from the IRS (so no annual paperwork).

Edited May 29, 2013 by LvR