Hi,

I have been doing a lot of research about IBR (about 40 hr so far), yet I haven’t found anything that guarantees the loan forgiveness. I even looked at my master promissory note, it states nothing about loan forgiveness.

My biggest concern is that within next 20 years, Washington changes the policy and we, borrowers, do not get to have our loans get forgiven (of course we still have to pay taxes on that amount)

I’m about to start a professional school in healthcare field next fall. When I am done, I will be having 370k in loan. I ran numbers, and after 20 yr, the loan becomes almost a million.

If I plan to pay through IBR and the policy changes, there is no way for me to pay back the loan ever. (with 7.9% graduate plus loan interest, the annual interest would easily exceed my salary).  Even filing a bankruptcy wouldn’t eliminate education loans.

*in that case, it would’ve been safe to pay with standard repayment program (20yr, 25yr, 30yr)

I think I can speak for other four thousand students who will be starting the school nationwide as I will . Most of them will have a lot of debt as well.

How can we, students, be certain that the forgiveness will be unchanged for next 20 years? Is that specifically written in the law?

Thank you,
Eugene

Great question!

I’m sorry to say that there is no such guarantee.  Just isn’t one.  But listen, my opinion is that total repeal of forgiveness is unlikely.  It is possible, yes, but unprecedented.  I wrote a bunch about the status of Public Service Loan Forgiveness here, and a similar analysis applies to the 25-year IBR forgiveness:
http://askheatherjarvis.com/blog/PSLF_is_secure

Thanks, Heather!

Do you happen to know which senator/congressman wrote the bill? I would like to send him/her a letter but I don’t know who is in charge of IBR bill?
Thanks

Eugene

You know who had a whole lot to do with it?  The now deceased Senator Edward Kennedy.  Also, Representative George Miller of California.

I agree with Heather there is so many people in our position (and there will be thousands if not hundreds of thousands twenty years from now) and we will be the generation/taxpayers in control.  The loans are the taxpayer’s/government’s problem as well.  If IBR was discontinued jumping everyone onto standard repayments there would be massive defaults and bankruptcies particularly in fields like law where the debt load is high but the salaries aren’t so hot.  There is no additional cost to the government of forgiving the loan.  The money was spent by the government when it paid off the private lender or when it disbursed the money to the college, I would imagine political pressure might even be such that the discharge of indebtedness income won’t even be taxable.  The only saving grace with IBR is that there will be thousands of others just like us with huge student loan debt and a strong need for such a program or at least to be grandfathered into such a program.  Then we can make sure it will stay around and work to our favor.