Heather,

I’m currently working on my Masters of Accountancy with about $120,000 in debt when I graduate (undergrad & graduate). Is there anything guarenteing IBR to continue to exist? My concern is that once I’m on the IBR, my monthly payments will be approximately $75 per month, while my interest adds up to approximately $680 per month. So as you can see, within 4-5 years my payments will become even more unaffordable.

Also, can the government change the rules/regulations on IBR even after you signed the MPN? I’ve read the entire MPN note, and it makes specific reference to IBR on number 15 page 6. Wasn’t sure if that means your locked in or not.

Finally, I’ve called Direct Loans about 10 times over the past week asking questions about IBR. They told me that once your on the IBR that you would be grandfathered into it, even if they repeal it. I’m not sure if this is true or not, but I’m hoping it is! Because otherwise I’m completely screwed when my loans reach 200k+ within 10-15 years.

Thanks,

Jeremy

Jeremy,

Congress can and does change student loan law sometimes.  Regulations are amended.  That said, Congress has never made student loan programs less advantageous for borrowers retroactively to apply to folks like us who have already borrowed.  Borrowers are typically subject to the rules that were in place when they borrowed, and sometimes are offered additional options, but never fewer.  That doesn’t mean it couldn’t happen.  It could, but it would be unfair and unprecedented. 

Heather

Heather,

I am new to the forums and I am not sure where to post my question…..so I am including it here:

Currently Scenario:
Unfortunately like many folks (I suspect) I have been unemployed and without a constant inflow of cash for a quite a bit of time.  I have been living off of my savings and 401k.  I owe approxomately $145k in student loan debt, of which, $140k is already consolidated into two consoldiated loans (One from my undergraduate degree and the other from my graduate MBA degree).  The remaining $5k is in Perkins loans.  With the exception of my Perkins loans, all my consolidated loans are currently being serviced through Sallie Mae.

As I currently do not have any income coming in, I called Sallie Mae to see if I could reconsolidate my existing loans with them as well as roll-over my other Perkins loans into a new consolidated loan and then do either an IBR or ICR.  Sadly, Sallie Mae informed me that they do not do any more consolidations and directedl me to the Direct Loans Consolidation .edu/.gov website to apply for a direct federal consolidation loan.  I am in the process of completing the application and I am now to the point where I need to select what type of consolidate loan payment schedule I want to follow.  As I am currently unemployed and can clearly show (at a minimum) partial financail distress , I am obviously leaning towards the IBR payment plan.

My problem is this:
My salary history has ranged from the mid-$50k’s to as high as the lower $80k’s.  Given the economic climate in this country and in my region (South Texas), the likelyhood of me securing long term employement with an annual salary in the low 80k’s is remote and probably unlikely.  Most jobs that I am applying for are paying around the high $50k’s to low $60k’s.  That said, I am trying to figure out what would be the best plan for me based on a ‘future-state’ whereby I am making around the mid to high $50k’s.

Based on my CURRENT finanical situation, BOTH plans will certainly temporarily eliminate any payment seeing as I don’t have any cash coming in.  Where I am having problems is determing what the possible ramifications could potentially be in the FUTURE for both my monthly repayment amount and the accrued/amortized interest calculation.

Any help would be greatly appreciated.  Thanks in advance!

Best Regards,