An overlooked way to lower monthly student debt payments

[Jefferson23]

* For anyone who may need relief, the info may be helpful.

January 2, 2015

By the time Wayne Tibak graduated from college this spring, he had more than $118,000 in student debt. Then came the monthly payments, $1,700 due every month. Tibak started working two jobs, one during the day at Home Depot and another at night at Wal-Mart. But it wasn't nearly enough to make the math add up.

So he turned to Google, typing "student loan payments" into the search bar. That's when Tibak discovered a government program he'd never heard of — one that lets borrowers cap their monthly loan payments depending on how much income they're earning.

The White House has enacted broad initiatives to give students more options for repaying their loans. Yet only 14 percent of Americans with federal student debt are enrolled in government plans that allow them to lower their payments if they're not making enough money to cover them, according to the Department of Education.

The plans are designed to prevent borrowers like Tibak from defaulting on their loans, a problem faced by about 20 percent of people repaying college debt. The trouble is that many of these borrowers are unaware of their repayment options. And even those in the know are often confused by the myriad choices, terms and paperwork.

http://www.chicagotribune.com/news/chi-student-loan-debt-20150102-story.html#page=1

[CountAllVotes]

1. These new "rules" went into place under Pres. Clinton

If you don't pay them off after 20 years time, they are dismissed.

I know 20 years seems like a long time but that is how long ago I myself graduated from grad school!



How time flies when you're having fun eh?

[PowerToThePeople]

2. i have dabated about signing up.

But, you get a new contract, that starts now and extends 20 years. That is a long time. Now if the 20 years were backdated to when I started paying, then I would be pleased with that plan.

[CountAllVotes]

3. I cannot remember what other options there are

but maybe you'll find another way.

Once you sign that contract for the 20 year deal, that is it.

The existing contract stands unless you change it or consolidate (if you have several loans that is) it.

Cannot tell you what to do but 20 years is a long time I agree.

[LiberalEsto]

4. That 20-year forgiveness doesn't work with private loans

which unfortunately is what we're stuck with.

[nlkennedy]

5. Sympathize with none...

Many people simply refuse to engage with these wonderful repayment programs because a brown skinned liberal is responsible for most of them. Let them choke on their debt and willful ignorance.

I say this because I've spent time trying to talk older college grads into using these repayment programs. The fear and negativity they immediately express is the true essence of conservatism.

[NYC_SKP]

7. Yup, they're voting against their own interests, like Obamacare, because of the color of his skin.

Welcome to DU.

[CountAllVotes]

8. Clinton enacted these laws

To my knowledge that "brown skinned liberal" has had nothing to do with the loans as they now stand.

When referring to a "brown skinned liberal" I'd like to know who that might be as I do not consider Pres. Obama to be a "brown skinned liberal". Nope.

[NYC_SKP]

9. Obama greatly improved and expanded Clinton's little program, and he is too a brown skinned person.

Among the range of skin-tones, his is more brown than most Americans and to most teabaggers he's a liberal.

Are you the one who alerted on that reply?

"brown skinned liberal" is the reason for the student loan problem? Isn't this racist as all hell. Alert YES. Ignore NO. Get rid of this troll = YES!!

I voted to leave it alone.

[magical thyme]

10. I'm in the income based repayment program.

On the positive side, it kept me from going under and I am grateful for that.

On the negative side: Due to the economy and the string of lies that led me to take out the student loans to begin with, I am not likely to ever be able to pay them off.

And I am forced to do my tax returns in a major hurry, or lose my adjustments. By major hurry, I mean I have to get them done within a couple days of receiving my W2s. To expedite and avoid having to pay for overnight mail meansdoing them electronically and relying on a not terribly reliable IRS to student loan transfer of the 1040.

And they are piling up to where even if I sell my house for a reasonable amount, I won't be able to pay them off and start over. Which means I'll be in this trap until my mid-80s when I will owe taxes on the total that will exceed the value of everything I own. Unless I die first.

So they bought me time, but they are not a cure for the problem, just a postponement while things get worse. My plan at this point, if I'm unable to sell my home within a year or two, is to die first. Fortunately, I have the know how to leave gently and painlessly.

[Jefferson23]

13. True, not a cure. I posted this for the relief it may bring for some.

I would prefer to see a moratorium on student loans until the system can restructure
the entire mess to be fair and equitable for students.

[daleanime]

6. Kick....

[Spitfire of ATJ]

11. Hell, I know someone who still owes for a crooked school they went to in the 80s....

They had their wages garnished for 25 YEARS and it turned out the collection agency never applied ANY of the money they collected to the principle on the loan. They pocketed thousands calling it "late fees and interest".

[Jefferson23]

15. Criminal is what that is and no accountability..horrific how many people have been

exploited.

[daredtowork]

12. Behind the paywall :( nt

[Jefferson23]

14. See below:

"There is no question that we need better information, better loan counseling, outreach after people enter repayment to make sure that borrowers know their options," said Lauren Asher, president of the Institute for College Access & Success (TICAS), an education nonprofit. "And those options need to be improved."

With national student debt approaching $1.3 trilion and many young graduates struggling to find jobs that pay enough to cover their monthly payments, these flexible repayment plans are critical.
lRelated Millennials' best investment is to pay off student loans


The Obama administration, meanwhile, is redoubling its efforts to get the word out about these repayment plans. But some worry that the efforts may not be enough to reach those who most need the help.

"The White House needs to be convening all of the different agencies that work on student loans, and saying how do we all collectively get the word out?"said Chris Hicks, an organizer for Jobs With Justice's Debt-Free Future campaign. "There's got to be an expectation of better service [while borrowers are still in school], where before you graduate they say, 'If you're not sure what your job is going to be, there is something called income-based repayment.' "

Understanding the options

The government has allowed borrowers to repay amounts based on their income for the last 20 years, but the Obama administration expanded the number of options and eligibility.


Plans vary based on the type of federal loan, and only loans provided by the government are eligible.

One of the most widely available plans is what's known as the income-based repayment (IBR) program, which covers new and older loans. It caps payments to about 15 percent of your income and forgives any balance that exists after 25 years. The calculation is based on your discretionary income, or whatever you earn above 150 percent of the federal poverty line ($17,505 for a single person).

http://www.chicagotribune.com/news/chi-student-loan-debt-20150102-story.html#page=1

[daredtowork]

16. Thanks for the text

I was hoping for a working link to spread it around. Perhaps it will become available after a day or two.

[Jefferson23]

17. You're welcome..sorry about that, for whatever reason I am not having difficulty

reading it through to conclusion and I'm not a subscriber.