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[copperbadge]

This post was checked for broken links and updated in February of 2017, but some information may still be inaccurate. This is intended as a guide; if you find the information below is in contradiction to the government websites that are meant to guide you through this process, the government is (slightly) more likely to be accurate.So, I was

Comments

[littlered2]

I only scanned that, because if looked fiendishly complex (and I'm in the UK, so yay) - but you have to apply to get an income-based system for your student loans? In the UK, that's automatic; it's all calculated based on your income, and you don't have to pay anything until you earn over £15,000 a year. It also gets cancelled after a certain number of years if there's anything outstanding, although I can't remember how long. (Also, the interest is linked to inflation, which means it's, as countless people told me during the process of applying to university, "the cheapest loan you'll ever have!".) Hurrah for socialism! Although PLSF sounds great, and I wish we had that here.

[copperbadge]

Well, it's even more complex than that.

When you are accepted to school you fill out a FAFSA, which tells the government how much money you or your parents have and earn. That sets what loans you can get.

All this? Is what you apply for to lower your repayments on those loans after you graduate.

[liquoricesun]

Except that once you graduate they slap a load of interest on it. (Or at least, they did to me. I got my statement and was like "waitwaitwait, we're in recession, how is there 4.5% interest?" Or maybe that's just my financial illiteracy? Dunno.)

[copperbadge]

It's 6% now. I was lucky to consolidate at 3.2%.

[paragraphs]

Putting this in my Memories section. My kid is going to need to know this (and wants to work for a non-profit, so... yeah). Unfortunately, her two biggest loans are private loans. Sigh. But this is good stuff. Thanks!

[pocketmouse]

My interest rate is so low that if I consolidated, I'd end up with something higher. Besides that, I'd rather pay it off as quick as I can rather than drag it out longer. Interest still adds up that way. As long as I can afford to pay it (and by afford I mean I make just enough to cover my expenses with literally nothing left over, in a good month), I will. Maybe if I had a job in the nonprofit sector that I could guarantee holding on to for 10 years, but that's not going to happen.

[copperbadge]

While I have no guarantee, I'd like to plan that I'll be here ten years. Admittedly the interest does rack up faster if you drag it out, but at the same time I'd rather pay a little less each month and afford a few more creature comforts. I can't afford the Standard anyway; I'm in Extended right now, so I might as well go to IBR and cut my payments in half. :)

[pocketmouse]

Yeah, I'd just rather be done with it. Seeing as I only have freelance and part-time work, I don't want debt hanging around any longer than it has to.

[copperbadge]

And that's certainly a valid option :)

[textileowl]

Thank you for making this make sense. Trying to make sense of in on the Direct Loan website was not working. Now that I've played with my numbers, this should help me a lot.

I'm making almost twice as much money as last year, and my housing situation is currently rent-free (not that it isn't family debt-free) that I'm glad I can pay my student loans, but qualifying for even smaller payments? Awesome.

[miraielle]

For what it's worth, the 120 payments do not even have to be consecutive. You could work at a non-profit for three years, go work somewhere else for a year, then go back to a non-profit and pick up with payment #37 of PSLF.

[copperbadge]

Yargh, I meant to mention that somewhere, yes. Thanks!

[fatascribunda]

Really? That's awesome! My FA office made it sound like I had to stay non-profit or gov't work for 10 years before I could move on. This is much more encouraging for those of us who are trying for that field. This way, if something changes (job loss, or whatever) you don't lose the PSLF option.

[copperbadge]

I would, however, extensively document when you started/stopped working for a NFP each time, so that you have supporting paperwork.

I think they want to make the point that you can't make 120 payments' worth at once -- you can't get into IBR, pay all 120 at once (or two or three a month) and then apply, you have to pay one per month. The non-consecutive nature fell a bit by the wayside on that.