On July 1, a new student loan repayment option is available for those who owe money for their college education. The new program, Income-Based Repayment, will allow you to cap your repayments to 15 percent of your gross income.
Some things to consider before signing up:
*You may end up paying more interest under the new program but your payments may be lower.
*If your income goes up, your monthly payments increase.
*After 25 years of paying the 15 percent amount, the loan balance would be forgiven. However, you may have to pay taxes on the amount that is forgiven.
Would you consider this program for paying off your student loans? What do you think?
Sign Up for The Frugalista News!
Related posts:
{ 3 comments… read them below or add one }
Ok. So I did the math and I am not so sure this works out. If its gross pay (before taxes and other deductions) and not net pay (after taxes) it does nothing for me. My husband and I have a substantial amount of student loan debt; I am an MBA grad while my husband is an attorney, we have a mortgage, 2 cars, insurance, etc….. and this does not seem to help. Am I the only one that sees it this way? Does it seem to work for anyone else?
Thanks for the tip! It’s always nice to save some money nowadays! Here’s another frugal deal that you should definitely check out — Miami’s 443……. Basically Miami’s on sale and EVERYTHING is buy 3, get one FREE. The website is miami443.com!!! I got a four-night stay at the Mayfair Hotel and Spa in Coconut Grove for the price of three.
@Christina: Did you use adjusted gross income? http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRCalc.jsp