More Student Loan Intel

Just off the phone with a student loan rep (my loans are through the government) and got a bunch of questions answered.

First, did you know that we can change our monthly repayment date? Mine was originally scheduled for the 28th of every month (what???). We are able to change the date to the 7th, 14th, 21st, or 28th of every month. Since I get paid at the beginning of the month (like the vast majority of workers in the US), I changed to a pay date on the 7th. I do automatic withdrawal which also reduces our interest rate by .25%. Every little bit helps, right?

During my chat, I also learned more details on the Income Based Repayment plan and the Public Service Loan Forgiveness plan. I wrote a little bit about these programs back in August but this post should provide more answers and less speculation.

The Public Service Loan Forgiveness program is intended for people with high debt, but who continue to make relatively low incomes because they work in a nonprofit, government, or other public sector job. After 120 consecutive payments (i.e. 10 years), Student Loans will forgive the remaining balance.

According to the Student Loan rep, we apply for this program after 10 years of payment, not at the beginning of our working careers. This means that we need to have signatures from every one of our employers to sign off on the paperwork stating that you worked for them for X years during the 10 year period. See I thought we got into the program as soon as we started working in the public sector, but apparently not. Note to self: don't lose track of former employers.

During the 10 years that we are making payments, we may have our monthly repayment rate adjusted using the IBR Plan. Income Contingent Repayment Plan or Standard Repayment Plan.

If we have high debt and low income we receive significant benefits from enrolling in the IBR or ICR plans. These will adjust down our monthly payments. Then, after 10 years, the Public Sector Loan Forgiveness plan will cover the rest. The combination of these programs works best for those of us with really high debt; with low debt (it is all relative), the benefits are minimal.

At least this is how I'm understanding it as of today.

Oh real life, how you pain me sometimes...