After I graduated and told anyone who would listen about my dire debt load, everyone casually and optimistically told me about IBR (Income Based Repayment). IBR caps your payment off at 15% of your discretionary income, so that payments are affordable and manageable based on your income and family size.
Many of my peers in grad school opted for IBR under the 25-year forgiveness plan, which states that if you make payments for 25 years under IBR, the rest of your loan balance will be forgiven. As this is new, there is some debate about how this will actually work, and whether people will get taxed based on their forgiven loan balance.
Based on my income, I am sure my payments would be pretty small and manageable. I have a friend who is unemployed and under IBR her payments are exactly $0 a month.
But I don’t want to be 53 years old when I pay off my student loans. I hardly want to be 30, but it looks like if I stay on task I can hopefully be debt free by 32. Which requires me to pay about $1300/mo for the next three and a half years. HOLY WHAT?!
Sometimes it seems so overwhelming. As someone who loves travel, I always think of what trip I’d be going on if that money weren’t going to debt. It’s a terrible way to think and I’m trying to stop going down that path, but know that in a few years I will be truly free and I can accomplish all my financial and life goals.
Do you have student loans? What payment plan works for you?