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IBR, PAYE, & PSLF repayment agenda for science teacher title 1 school
| Poll: Does this sound like the best route for repayment? Total Votes: 0 |
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| no, it’s flawed | 0  |
| probably not, there’s too many variables | 0 |
| yes, it sounds solid | 0 |
| maybe | 0 |
First off, I’d like to say thanks for reading this lengthy post and for any advice you may be able to contribute.
Question: How can I minimize what I actually pay back using the programs that are available to me as a teacher? Basically, how can I minimize my payments until my loans can be written off?
Here’s the situation I’m trying to make sense of. At this point, I see loan repayment as a game where I’m trying to obtain maximum benefit in the form of lower interest paid over time. The amount of ambiguity and inconsistency in this process is astounding.
I’ve got right at 60k in loans right now. First loan in fall 2006, last loan in spring 2012. I’ve signed up for IBR. I’m a full-time Science teacher in a title 1 school. It’s not officially title 1, but it’s on the list of low income schools and will always be. (Our district won’t label high schools as title 1). My income, based on current salary schedules, should range from 33k to a max of 45k after 10 years (depressing).
Obama has expanded PAYE for all loans prior to 2007 from what I understand, and is expected to go into effect in 2016 (or dec. 2015). I plan on switching from IBR to PAYE when it goes into effect. That way, my payments will be 10% of my discretionary income instead of 15% or 20% (or whatever it actually is right now).
Since I’m a full time science teacher at a low income school, after 5 years of consecutive teaching, I qualify to have “up to $17,500” forgiven. Additionally, since I’m a teacher, I also qualify for the PSLF after 10 years.
Do I have this figured out correctly? PAYE plan when/if it’s available, then they may forgive $17,500 after 5 years of consecutive teaching. Then, after I make a total of 120 consecutive, full, on time payments they may write the balance off completely?
FYI - You can’t use the same years for teacher loan forgiveness and PSLF (see Q63 - https://studentaid.ed.gov/sites/default/files/public-service-loan-forgiveness-common-questions.pdf). So you would have to do a total of 15 years to take advantage of both programs. I’m not sure why it is this way. So it really depends on how much your loans are and if you are a qualifying teacher for $17,500 forgiveness or the lower $5,000 amount.