I have read about sad stories related to how student borrowers mess up themselves for not paying their loans in the first place. Many of them get in default and have nightmares from creditors and collection agencies harassing them to pay back what they owe on the loans. I don’t want to make the same mistake, so I would like to ask you a few questions related to Income-Based Repayment.

1. According to the IBR calculator found at (http://www.ibrinfo.org), my monthly loan repayment would be about $260. Will my spouse’s income be affected, meaning will she be required to help me pay for my loan or is this only my responsibility to pay?

2. Why is my spouse’s income required under IBR, even though I am the only one applying for the fedeal loan, not her?

3. I learned that there are some tax implications for those under IBR. What are these tax implications and how bad will they affect our income (including mine and spouse)?

4. If I suddenly die, will my spouse and children be responsible to pay my federal loan? Will they be harassed by creditors and collection agencies? If they are harrassed what can be done to prevent this from happening?

5. Is Public Service Loan Forgiveness Program guaranteed by the federal government, meaning will my federal loan (no matter what) be forgiven upon satisfying 120 required monthly payments and for working in public service 10 years?

6. As I mentioned earlier, my estimated monthly loan payment under IBR would be $260. Suppose I can’t afford it, can it be reduced to at least $50 rather than applying for foreberance or deferment?

7. Do I need to apply for federal direct loan, then choose a payment plan such as IBR, then upon satisfying the 120 monthly on-time payments, then apply for loan forgiveness to have the rest of my student loan forgiven?

8. As you know, the future is unpredictable, so what if I can’t find a job in my chosen field of study, the grace period has ended and need to begin to make the loan payment. What can I do in this situation?

9. Suppose the loan servicer is refusing to reduce my monthly loan payment or is not doing what I want due to myself being in a financial hardship or have a tight budget, whom do I turn to for assistance?

I would appreciate your answers. Thank you.

JAbr77

Hello JAbr77,
  Thank you for visiting our site and for your inquiries.  My name is James Jarvis and I am Heather’s Communications Director (and husband).  First off, please read the guidelines for Heather’s Forum here: http://askheatherjarvis.com/forums/viewthread/206/.  Of note, Heather cannot unfortunately provide personalized legal advice without first associating with local counsel in your state.  She is only able to provide general legal and financial information.  Looking over your questions above, I’ll try to provide you with some links of where you can find more information.

To read more about IBR, please check these sites and/or forum posts:
- http://studentaid.ed.gov/repay-loans/understand/plans
- http://studentaid.ed.gov/sites/default/files/income-based-repayment-common-questions.pdf (Question #24 addresses married borrowers)

As to PSLF, check out these resources:
- http://studentaid.ed.gov/sites/default/files/public-service-loan-forgiveness.pdf
- http://askheatherjarvis.com/uploads/images/PSLF_QAs_final_02 12 10.pdf
- http://askheatherjarvis.com/uploads/images/The Right Kind of Job for PSLF.pdf
- http://askheatherjarvis.com/uploads/images/The Right Kind of Loans for PSLF.pdf
- http://askheatherjarvis.com/uploads/images/The Right Kind of Payments for PSLF.pdf
- http://www.finaid.org/calculators/ibr.phtml

Hope these links and resources help.

Best,

James Jarvis
Communications Director
Heather Jarvis, Student Loan Expert LLC