Just dropped $500 on my student loans. If feels good to be able to start this back up aggressively paying it off after a few months hiatus.
Though I’d love to see my lower balance loan knocked out, it makes more sense financially to tackle the larger loan since there is interest involved, and payments will resume in January. I’m still hoping I see some forgiveness but if not at least I know I’m working on it
I wish there was a change in the repayment practices though. It makes no sense to make payments for years only to see the loan increase. Ridiculous
September 9th, 2022 at 08:03 pm 1662750200
First, for Income Based payments, the amount due will drop to 5% of salary instead of 10%. There is also an exemption amount used to reduce income before the calculation.
If the amount due doesn’t cover the interest, the uncovered amount is forgiven immediately, not added to the balance.
So you never owe more that you borrowed.
People whose initial loan amount was $12,000 or less will have the remaining balance forgiven after 10 years. Everyone else will have tge balance forgiven after 20 years.
No Federal tax is due on forgiven amounts, but it seems some states will tax.
All of the forgiveness assumes that loans stay in good standing, with payments made unless loans are in forbearance.
To me, that is the best part of the program - preventing this from happening again.
And although there are ‘bad’ parts to inflation, part of the income based payment issue is that we were not experiencing inflation so many salaries didn’t rise. Inflation will drive up wages which will drive up the amount repaid monthly.
The
September 10th, 2022 at 12:10 pm 1662808211
September 12th, 2022 at 12:00 am 1662937243