Slate has a law school debt-trap article that details a new way that public interest law students can survive with 100k of debt on their backs. Most people know about the plan where you’d work for 10 years at for the govt or a non-profit and they’ll forgive all your federal debt.
But this presents a new alternative called IBR — Income Based Repayment
The first program won’t be up and running until July 2009, but it could certainly benefit many underpaid and overdebted do-gooders. The Department of Education essentially caps the percentage of your discretionary income you are expected to pay toward your student loan debt.
Info is here, on the Dept. of Education’s site including this helpful chart.
Who can use IBR? IBR is available to federal student loan borrowers in both the Direct and Guaranteed (or FFEL) loan programs, and covers most types of federal loans made to students, but not those made to parents (click here for more about qualifying loans). To enter IBR, you have to have enough debt relative to your income to qualify for a reduced payment. That means it would take more than 15 percent of whatever you earn above 150% of poverty level to pay off your loans on a standard 10-year payment plan ….
How does IBR make payments more affordable? IBR uses a kind of sliding scale to determine how much you can afford to pay on your federal loans. If you earn below 150% of the poverty level for your family size, your required loan payment will be $0. If you earn more, your loan payment will be capped at 15 percent of whatever you earn above that amount. Except for the highest earners, that usually works out to less than 10 percent of your total income.
Hopefully this program will allow more people to work in public interest jobs and allow those already in to live more comfortably.
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An interesting read – some good tips here
Let’s be realistic; the way the legal market is looking right now, you don’t need to be in public interest law to need some serious help with your law school debt.
Thanks for this quick tips,about debt,btw you should check your site in Opera.
Glad you found it useful. Also, I’m posting this in Opera. Looks okay to me?
I’m very interested in this topic, I am always searching online for articles that can help me. Thank you
I love your site. I look forward to reading more of your posts. Thank you!
http://www.gadgetnutz.com/2006/05/17/mini-me-on-my-mini-opera/
There are, what I perceive to be, illegal activities occurring with the administration of the IBR program, unfortunately. The IBR plan is designed so that 25 years from the date of the origination of the loan date, the loan is to be forgiven if you qualify for the ibr plan. However if you call Sallie Mae, their overseas outsourcers who answer the phone have been trained to say that it is 25 years from the date that you begin the IBR, not the date that you took out the loan. This is illegal and could add on several more years before the loan is forgiven. I’ve called and spoken to different reps and even have spoken to their supervisors and they all give the incorrect information – 25 years from when you started the IBR payment plan! Has anyone else experienced the same problem? I am really concerned since I have loans that are over 10 years old and now they are saying the 10 years doesn’t even count toward the forgiveness after 25 years. What do we need to do? Write to Congress and the President?
I appreciate the concern which is been rose. The things need to be sorted out because it is about the individual but it can be with everyone. The initiative taken for the concern is very serious and need an attention of every one. This is the concern which exists in the society and needs to be eliminated from the society as soon as possible. There is nothing called a free lunch is this world. If anything needed to be resolved then initiated need a support to be sorted out.
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http://www.debtmanagementplan.co.uk
This is a wonderful opinion. The things mentioned are unanimous and needs to be appreciated by everyone. The initiative taken for the concern is very serious and need an attention of every one. This is the concern which exists in the society and needs to be eliminated from the society as soon as possible. There is nothing called a free lunch is this world. If anything needed to be resolved then initiated need a support to be sorted out.
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http://www.debtmanagementplan.co.uk
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