flutterby
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Post by flutterby on Feb 13, 2019 20:31:52 GMT -5
Chloe, I'll be watching this thread with interest. I also have a job that qualifies me for the loan forgiveness program. In my case, even if I do manage to have my balance forgiven after 10 years of payments, it'll only save me a few thousand dollars. So I'll do what I can to follow the rules, but it won't kill me if I somehow screw it up (or I don't screw it up, but somehow end up not qualifying anyway, which seems more likely).
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Knee Deep in Water Chloe
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Post by Knee Deep in Water Chloe on Feb 13, 2019 21:22:16 GMT -5
I reorganized and added a bit to the original post.
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Knee Deep in Water Chloe
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Post by Knee Deep in Water Chloe on Feb 13, 2019 21:32:08 GMT -5
Loan 1 of 2 Loan Status: FORBEARANCE ******It's in forbearance right now due to the transfer process; I don't think a Feb payment went through, but March payment should. Disbursement Information Disbursement Date: 08/26/05 ******This is weird because I finished my MAT in June 2005 Loan Program: DIRECT SUB CONSOLIDATION LOAN Owner: U.S. DEPT OF ED Guarantor: FEDERAL School: MULTI Out of School Date: -- Interest Rate Information Interest Rate: 2.875% Interest Rate Type: FIXED RATE Subsidy: SUBSIDIZED Loan Balance Original Balance: $22,333.00 Unpaid Interest: $97.17 Principal Balance: $19,254.38 Payment Information Monthly Payment: -- *******This doesn't say anything right now because of the transfer process. It has been $172 for the past year. Repayment Term: 180 Months Expected Payoff Date: 03/07/2034 Due Date Information Next Due Date: -- Days Delinquent: 0
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Knee Deep in Water Chloe
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Post by Knee Deep in Water Chloe on Feb 13, 2019 21:36:41 GMT -5
Loan 2 of 2
Loan Status: FORBEARANCE *****It's in forbearance right now due to the transfer process; I don't think a Feb payment went through, but March payment should. Disbursement Information Disbursement Date: 08/26/05 ******This is weird because I finished my MAT in June 2005 Loan Program: DIRECT SUB CONSOLIDATION LOAN Loan Program: DIRECT UNSUB CONSOLIDATION LN Owner: U.S. DEPT OF ED Guarantor: FEDERAL School: MULTI Out of School Date: -- Interest Rate Information Interest Rate: 2.875% Interest Rate Type: FIXED RATE Subsidy: NON SUB Loan Balance Original Balance: $22,657.13 Unpaid Interest: $103.61 Principal Balance: $20,529.64 Payment Information Monthly Payment: -- *******This doesn't say anything right now because of the transfer process. It has been $172 total for the past year. Repayment Term: 180 Months Expected Payoff Date: 03/07/2034 Due Date Information Next Due Date: -- Days Delinquent: 0
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gs11rmb
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Post by gs11rmb on Feb 14, 2019 9:11:21 GMT -5
I think I'm a little confused. It looks like you took out two loans totaling $44,990 in August 2005. In 13.5 years you've only paid off $5,206. Is that correct?
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Deleted
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Post by Deleted on Feb 14, 2019 9:14:19 GMT -5
I think I'm a little confused. It looks like you took out two loans totaling $44,990 in August 2005. In 13.5 years you've only paid off $5,206. Is that correct? Welcome to the wonderful world of IBR.
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justme
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Post by justme on Feb 14, 2019 9:41:53 GMT -5
I think I'm a little confused. It looks like you took out two loans totaling $44,990 in August 2005. In 13.5 years you've only paid off $5,206. Is that correct? Welcome to the wonderful world of IBR. Holy crap! Not a dig on chloe at all, but if that's normal then the student loan bubble is worse than I thought.
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haapai
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Post by haapai on Feb 14, 2019 12:23:52 GMT -5
I'm massively relieved to see that the payments have been covering the interest. It's also nice to see that the interest rate is low enough (2.875%) that Chloe can take a forbearance without fear that the capitalized interest will tip that equation. I'd be whistling a different tune if these loans carried interest rates closer to what new graduate staffords were costing in the year in which they were consolidated.
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haapai
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Post by haapai on Feb 14, 2019 13:37:01 GMT -5
This link to an NPR piece on teachers with student debt seemed relevant. It is worth noting that the survey results that are included in the article have very little scientific value. It is also worth noting that many of the respondents are younger than Chloe and took out student loans for graduate education after she did -- after the existing caps were removed and at much higher interest rates.
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Knee Deep in Water Chloe
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Post by Knee Deep in Water Chloe on Feb 14, 2019 14:24:55 GMT -5
I think I'm a little confused. It looks like you took out two loans totaling $44,990 in August 2005. In 13.5 years you've only paid off $5,206. Is that correct? No, that date is wrong--which actually makes it worse. I took out the loans in June 2004. One covers tuition and one covers my share of 16 months of living expenses + full time day care for one kid and part time day care for the other kid. I finished my master's degree in July 2005 and started full time work in late August 2005. My first paycheck was in late September 2005.
Let's assume--because I've not been able to find it online, and I don't want to get the 15 yo desktop out of my garage to see if I can still access MS Money--that I started paying my student loans six months after graduation. That would be January 2006. I deferred for at least six months if not a year during my divorce, and I deferred at least a year during a post-graduate program from July 2011 - August 2012. I used the loan payment to pay for travel and hotel rooms to go to my classes. (As a side note, I took out $16,000 through Wells Fargo to pay the tuition for that post-grad cert. As of next month, that loan will be paid off.)
So, of the 12 years or 144 payments possible, at least 24 payments have been missed.
Last year, I didn't realize I'd gone into forbearance because I had seven graduate credits at one time. My loans automatically went into forbearance even though I was paying cash for the tuition. The payments were automatically in YNAB, and I hadn't reconciled that particular account for a few months before I realized what was happening. Instead of putting that money toward the federal loans, I put it to the WF loan I mentioned above since its interest rate is higher and it cannot be forgiven.
That was at least six payments missed. Let's assume then, at least 30 payments total have been missed leaving a maximum of 114 possible payments. Let's assume that I've paid an average of $150 per payment for those payments. (That's a major assumption; it could be less. I'll look into it later.) That means I've paid a no more than $14,250 towards these loans since I finished my master's. Yes, I've worked full time every year.
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bean29
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Post by bean29 on Feb 14, 2019 14:47:36 GMT -5
I think what is scary is that Chloe and her DH have good paying jobs, and she has worked hard to get into a solid financial position. If she has such large loan balances 12+ years out, what about people that did not finish, or were not able to get employment in their field or have other issues. One begins to see why they want to deduct loan payments directly from paychecks.
Personally, I do not like the idea of them garnishing payroll for people not in default, and if they start that for student loans where will it end?
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haapai
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Post by haapai on Feb 14, 2019 15:18:31 GMT -5
I'm posting this just in case this thread goes on for a while and the prior post confuses folks. I'm not casting stones at anyone for posting on the wrong thread. I've done the same thing more times than I care to remember.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Feb 14, 2019 23:33:27 GMT -5
Welcome to the wonderful world of IBR. Holy crap! Not a dig on chloe at all, but if that's normal then the student loan bubble is worse than I thought. I had 20k loan on my masters. I was so depressed when after paying for about 5 years with some forbearances, deferments of about 18 months I still owed 20k. I consolidated in 2001/2, they automatically went into deferment when I went back to school and I still owe about 3k on those. I took those loans out in 1993. Got scared about the debt and got my masters in 1996 without taking more loans. Payments started in 97. So yeah. Pretty scary.
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sesfw
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Post by sesfw on Feb 16, 2019 12:16:39 GMT -5
Every time I see a thread like this I shudder about my g-dtr.
About 7-8 years ago she received a BA in psychology from U of Phoenix, a well known 'predatory' school. First time I asked her the loans totaled $17K. Last time I asked about a year ago they were up to $50K. She has made bad decisions and isn't working in her field of study. She applies for forbearance each year and she, SO, and DD are just barely making it. Her SO is a manager at a fast food place, and she works at the same place part time.
I know she will never get this paid, I also know her future credit is destroyed beyond repair.
I don't know what the answer is …….
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Knee Deep in Water Chloe
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Post by Knee Deep in Water Chloe on Feb 16, 2019 12:29:40 GMT -5
Chronicle Post #3 I have official notification that all of my employment as a public school educator has been certified. I still don't have notification of how many of my prior payments count towards the 120 payments.
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haapai
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Post by haapai on Feb 16, 2019 12:32:55 GMT -5
I wanna hear that number as soon as you get it.
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Knee Deep in Water Chloe
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Post by Knee Deep in Water Chloe on Feb 16, 2019 12:38:17 GMT -5
I think what is scary is that Chloe and her DH have good paying jobs, and she has worked hard to get into a solid financial position. If she has such large loan balances 12+ years out, what about people that did not finish, or were not able to get employment in their field or have other issues. One begins to see why they want to deduct loan payments directly from paychecks.
Personally, I do not like the idea of them garnishing payroll for people not in default, and if they start that for student loans where will it end? I've been thinking about your post. There are a few caveats to my personal story regarding the "good paying jobs". 1) Remember that while we've been $150K+/year as a houshold for six years, that's only been for six years. My first seven years were between $38K/year & $44K/year. That's it for just me with XH for one year, on my own for four, and two years of not fully combining finances with DH. (I was managing all of the money, but on paper, the finances were separate. We did have a percentage split of expenses, so one could defintiely say I wasn't actually on a single income.)
2) I got put in a financial coma with the real estate market crash. That took at least $100,000 of cash after rental income to get me through ten years. In theory, I could have paid that towards the student loans and been done with them. Not everyone will have that problem.
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cktc
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Post by cktc on Feb 16, 2019 12:40:16 GMT -5
That's great news. Fingers crossed a good chunk of payments will be counted.
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bean29
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Post by bean29 on Feb 16, 2019 19:45:57 GMT -5
Chloe, does a qualifying loan have to have never been delinquent, or do delinquent payments just not count to the 120 payments?
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Knee Deep in Water Chloe
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Post by Knee Deep in Water Chloe on Feb 16, 2019 20:49:26 GMT -5
Chloe, does a qualifying loan have to have never been delinquent, or do delinquent payments just not count to the 120 payments?
The way I read this, it seems like a delinquent payment would just not count toward the 120 payments as opposed to making the entire application invalid. I've never been in default, and I don't think I've ever missed a payment or made a late one. We'll see! from myfedloan.org:
Make 120 Qualifying Payments Must have been made:
After October 1, 2007 While employed full-time at a qualifying employer Under a qualifying repayment plan On-time (no later than 15 days after the scheduled due date) Each month, satisfying the installment amount due for that month in full When the loan is being actively billed, and is not in a default status
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debthaven
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Post by debthaven on Feb 16, 2019 20:49:46 GMT -5
2) I got put in a financial coma with the real estate market crash. That took at least $100,000 of cash after rental income to get me through ten years. In theory, I could have paid that towards the student loans and been done with them. Not everyone will have that problem.
The irony is, you COULD have walked away from those two underwater homes. Plenty of people did. You chose not to. You CANNOT walk away from the student loans.
Just wanted to point that out.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Feb 16, 2019 23:23:47 GMT -5
Very true!
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finnime
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Post by finnime on Feb 23, 2019 11:59:10 GMT -5
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Knee Deep in Water Chloe
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Post by Knee Deep in Water Chloe on Mar 9, 2019 17:34:03 GMT -5
Update In going through the process, our income-based repayments have been adjusted. DH's payments went from ~$272 to $538.17. Mine went from ~$177 to $341.80.
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haapai
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Post by haapai on Mar 9, 2019 17:53:31 GMT -5
Is that a recent change in payment amount due primarily to switching from one IBR plan to another? Or is that the cumulative effect of several years of income growth?
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Knee Deep in Water Chloe
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Post by Knee Deep in Water Chloe on Mar 9, 2019 18:45:35 GMT -5
Is that a recent change in payment amount due primarily to switching from one IBR plan to another? Or is that the cumulative effect of several years of income growth?
It might be a combination, but I believe the latter has more effect. In applying to be on the PSLF program, the federal government switched our loan management organizations. For some reason, even though our loan management organization has been changed at least twice before, we've never had this large of an increase. Every year, our payments were increased, but obviously not much due to the prior amount due. It's a bit startling as to how much the payments increased.
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haapai
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Post by haapai on Mar 9, 2019 19:05:42 GMT -5
FWIW, imagining a life on IBR is an interesting thought experiment.
There was a time in my early thirties when my income was terrible and varied a lot. Consequently, my marginal tax rate and the amount that I actually got to spend from each additional dollar of income, swooped around a lot. Calculating the tax obligations of income greater than what I had earned in the prior year was complicated and confusing but at least I had copious and reliable tax information available to me. It also helped that once April 15 of the next year rolled around and my taxes were paid, I no longer had to worry about the consequences of that extra bit of income.
I don't think that I would have liked having monthly payments that were based on income that earned more than twenty months ago, especially if the formula for calculating those payments was harder to find and calculate than tax obligations.
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geenamercile
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Post by geenamercile on Mar 9, 2019 19:14:35 GMT -5
IBR are calculated yearly. They use your tax return and household information.
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haapai
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Post by haapai on Mar 9, 2019 19:16:59 GMT -5
Is that a recent change in payment amount due primarily to switching from one IBR plan to another? Or is that the cumulative effect of several years of income growth?
It might be a combination, but I believe the latter has more effect. In applying to be on the PSLF program, the federal government switched our loan management organizations. For some reason, even though our loan management organization has been changed at least twice before, we've never had this large of an increase. Every year, our payments were increased, but obviously not much due to the prior amount due. It's a bit startling as to how much the payments increased. It sounds like you have switched from a program that requires loan payments of 10% of discretionary income to one that requires loan payments of 15% of discretionary income and has a different definition of discretionary income.
I'm sorta crying for you. I have no idea how to figure out how that black box works. I'm the sort that really loves math and believes that it can really set you free, but getting high-quality, reliable information regarding how that amount was calculated makes me want to pound my head against a wall. If you manage to figure out how to get that information without subjecting yourself to a calculator, you should share that information.
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Knee Deep in Water Chloe
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Post by Knee Deep in Water Chloe on Mar 9, 2019 19:29:27 GMT -5
It is set now to a ten-year pay-off. I think I had it set to a 30-year pay-off. That would make sense. I wonder if I should alter the I chose.
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