To start off, you should know a little about me (I’m Bach from AdeptDebt where I write about newlywed finance) and why I choose to write a guest post on student loans. Well, I have about three times the national average in student loans and am determined to pay back the least amount possible as soon as possible!
I should mention at this point that I currently work in local government, and will likely always work in the public sector…. making me eligible for the public servant forgiveness program. At least for my $63,000 and climbing federal student loans.
Alice @ Dont Debt says
I have a bit over $50,000 or so in student loans. I've heard of the income based repayment plan, but had not heard of the public servant forgiveness. I don't know that I completely understand how it works. If you're on a 10 year repayment plan and you have to make 10 years worth of payments to qualify, how does that equal getting anything forgiven? It almost seems like a clever way of getting everyone to make their payments on time.
Bach says
Income based is less than the 10 year plan each month, and public servant cuts it down to ten years instead of 25 years.
Alice @ Dont Debt says
Woot! I qualify for that!! However, according to the debt repayment plan spreadsheet that I've come up with, I'll be debt free in just a little over four years. I don't know if I could live with myself just making the minimum payments for several more years when I could really just pay them off. It's something I'll definitely need to consider. The option is there for a reason, right? I should take advantage of it. *sigh* Decisions, decisions.
Bach says
If I could pay it off, I would!
Lesley @ my lively m says
my husband and I have about $100,000 in student loans (aaahhh, as I feel like purging)…and we start paying them back in June. not sure how it's going to pan out though and it makes me quite anxious thinking about it.
Bach says
It is stressful until you figure it out! Good luck!
444 says
I don't have a comment on the exact subject matter, but I wanted to let you know that I linked to this post in my post today.
budgetgradstudent says
I've got $20,000 in student loans so far, and am hoping to not increase that. Fortunately, I already planned on working for the federal or a state government, so I'll keep this in mind. Thanks for the information!
CeCe @Frugalista Mar says
Wow. That's a bunch of student loans and you already know you aren't the only one. If you can honestly say grad school was worth it then that's great. Me, I just got about 16k for a State college BA and I paid it off in 10 years on their plan. I will not do grad school b/c of loans especially if I don't think it will boost my income substantially to be worth it. That forgiveness plan is great but it is a bit scary that you must commit to that one path.
Bach says
It IS a scary path, and I'm lucky everything has worked out so far. The job I wanted required a grad degree, so for me it wasn't about making more money, but the job I wanted. It's a solid but not high paying job with awesome benefits.
debtntaxes says
I might be the only one that thinks this. But I don't really agree with the whole Public Servant Forgiveness Plan (and I also work for the Gov.) I'm not saying that there shouldn't be programs out there to help people. No matter what those loans are going to be paid by somebody. The initial money for the loan came from investors/taxpayers, to say that they will be forgiven and just go away is not the whole truth. Taxpayers will foot the bill on it, which takes money away from other programs that the money could be used for. I don't think taxpayers should have to pay for students partying expenses (not saying everybody used student loans for that). I guess my thinking is that if I took the loan out I should repay it, and that goes for any loan. If I have to work two or three jobs then I that's what I will have to do. I'm just looking at this from the perspective of someone who is tired of seeing our country go into debt more. Obviously there will be situations where a person cannot repay student loans (medical reasons and the like)and that I am ok with being forgiven.
Alice says
I tend to agree with you. Even though as you can see in my above comment, I qualify. I'm still going to work on my debt reduction plan and hope to have everything paid off in four years.
Bach says
I was hoping for a good discussion on that aspect. 🙂 I feel this way about student loan bailouts and people walking away from underwater mortgages they can afford to pay.
DebtnTaxes says
@Alice, That is one of the reasons why I read your blog everyday. A lot of your values are in line with mine. @Bach- I just think that people should do as much as they can to pay their debts before they take the forclosure/bankrupsty route. Nobody was forced to sign the loan papers to accept the money.
Emily @ evolvingPF says
I might agree with you if student loans could be discharged in bankruptcy, but they can't. Not everyone is capable of working three jobs to pay her loans (of any type) even if she had the best of intentions when she took out the loans.
Bach says
Thanks Emily. I always PLANNED on paying it all back, but if the cards fall such that I don't, then I don't have guilt not doing so (but will still pay most back). I also work two jobs… I don't think student loans should be discharged in bankruptcy, unless you also give the degree(s) back…
Bryan says
I'm sure you know this and didn't include it, but another way to lower your AGI is to invest in a traditional IRA in conjunction with your 401(k) and other pre-tax retirement accounts.
shopping2saving says
Omg love this post! My BF did the IBR thing and I always get so confused when he talks about it. I may have to contact you about this if I am still lost later down the line.
Bach says
Sure! Obviously I have spent a lot of time trying to figure it all out (and it's sooo complicated, thus the longest post ever).
SavvyFinancialLatina says
Great article! It really informed about IBR. I am not going into a government job so this is not for me. However, it will benefit other people to be informed. Will link back to this post this week or next week when I talk about financing your education.
SavvyFinancialLatina says
I could not find your twitter account on your blog.
Bach says
Michelle tweets at />And I do not tweet. And thanks for the re-post!
lil desiqua says
So if I'm understanding this IBR info correctly, after 10 years the remainder of your loan will be forgiven? But you must stay working in a government or non-profit job for those 10 years. And you are locked into paying a certain amount every month for those 10 years. Is that right? I guess my main question is that if you could actually pay off the loans by putting in a little extra every month, would the 10 years be shortened at all? Or you somehow came into a large sum of money, would you be able to just pay off the sum of the loans or would you be locked into paying for 10 years?
Bach says
Hi, if you are interested in paying extra each month to be done in less than ten years, or think you'll come into a large sum to pay it off, IBR is probably not the plan for you over the ten year standard plan. If you can pay it off earlier, then do it! 🙂
The Bluths says
money just sucks… that's all i have to say!
Anonymous says
Thank you so much for this post. I've been really debating my options for when I graduate in May. I will have a graduate degree and I am sure I will be working for non-profits for the rest of my life, which is fine with me. The particular population I'm interested in working with has non-profit organizations which work for this population.I think I will definitely have to start out with IBR regardless of other options as I really need experience in my field to get a better job. I have a question about the AGI. Would you be able to file separately to qualify, if you do make $100k together? I guess I'm asking because, if my boyfriend and I got married it is very likely we'd be making more than $100k a year, together, within 5 years. However, I don't want him to feel responsible for paying any of my loans. Is that an option?Thank you again!
Bach says
Yes, you can file separately! Then you will only have your own income and debts in the equation. However, there are some downsides to filling separately so always run the numbers both ways (I use the IBR calc and the IRS calc) and look into ways to lower your AGI so that you get the best payment and tax situation.
Bach says
Oh, and good luck anonymous!
Bach says
Amazing! Keep up the good work! Two years is awesome- I'd do it if I could!
Karunesh @ chase-a-d says
You are right that education is becoming expensive. It puts a lot on pressure on youngsters to cover the loans
cjb says
We are using extra income to pay off debts or purchase things we really "NEED"