Question:
Dear Steve,
I am the sole provider for me and my daughter, which will be a sophomore this upcoming fall. I have a outstanding student loan for 29,000. I attended a 2 year technical college called Miller-Motte, I graduated with an associates degree, which have never done any work in that field.
I work at a production plant making about 32000.00 a year. I paid some government funded program 750.00 to adjust my loan hoping I could get loan forgiveness based on my income.
I did not so far now I’m in deferment until next year. My question is am I eligible for loan forgiveness?
Am I eligible for loan forgiveness based on the IBR?
Gwendolyn
Answer:
Dear Gwendolyn,
From what you’ve shared I think you have federal student loans and contacted a company to help you with your student loan situation.
Your impression that you paid “some government funded program 750.00 to adjust my loan.” concerns me. There is no government program that requires you to pay any money to enter an Income Based Repayment program. If you tackle the paperwork and application yourself, it is a totally free process. What you will need to evaluate at this time is if you are paying a monthly fee to the company that assisted you.
A deferment can cause your balance to rise dramatically since interest is being added to your balance all through this time you are not making payments.
What you might want to consider doing at this point is consolidating your federal student loans into a Direct Consolidation Loan and elect to repay the loan via an income driven payment plan. After 20-25 years the balance of the loan due will be forgiven. As it stands now, you may be eligible for some income taxes due on the future forgiven loan unless Congress changes the law between now and then.
Each year you would need to recertify for the income based program and confirm your income. But based on your current income, your monthly payment would be very, very low.
For more information on student loan repayment options, click here.
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Sure you are eligible, just fill out a form and you are good to go you can even find out how much you would pay with this calculator http://www.nelnet.com/Pages/IBRCalculator.aspx?blockid=98,120,122,119,134