Subscribe to our mailing list

X

I’m a Teacher. How Can I Lower My PLUS Loan Payment?

By on March 8, 2016

Question:

Dear Steve,

My student loan (originally taken out for my children) is now owned by the government and administered by fedloan.gov. The loan is in my name alone — my wife is not on the loan.

1. Does filing separately exclude my wife’s income from consideration in an IBR? When I started with fedloan.gov my payments were $0, but they have been floating up since my wife inherited an interest in a family property.

2. To what extent does being a classroom teacher in a Title I school get my liability forgiven?

Kerr

Answer:

Dear Kerr,

I think what you are referring to is a Direct PLUS Loan you took out to pay for tuition. To be eligible for repayment under an income driven repayment plan you’d need to first drop the loan into a Direct Consolidation Loan. You can then select your repayment option.

The loan would then be eligible for the Income Contingent Repayment (ICR) plan, not the IBR. Under the ICR your payment would be the lesser of 20 percent of your discretionary income or what you would pay on a repayment plan with a fixed payment over the course of 12 years, adjusted according to your income.

If you are “married filing separately” then only your income will count towards the payment plan. Whatever you do, DO NOT go anywhere near the REPAYE repayment option. It will suck in all income regardless of filing status.

Once you consolidate and elect to repay the loan via the ICR program, you must make 120 full monthly ICR payments or regular payments and then the balance would be forgiven, tax free.

Your teaching would qualify under the Public Service Loan Forgiveness Program if you are employed at a non-profit school or a public school that provides public education. Since you said you are at a Title I school, I’m initially assuming you would qualify.

READ  Should I Take a 401(k) Loan to Payoff My Parent PLUS Student Loans?

morehelp1
Choice1 Choice2 Choice3 Big Hug!
Get Out of Debt Guy - Twitter , G+ , Facebook
If you have a credit or debt question you'd like to ask just use the online form .

Last step, fill out the information below or call us for Priority Assistance.

What problems are you having with your report?

Your first name is required. Your first name is required to be at least 2 characters. Your first name cannot be longer than 50 characters.
Your last name is required. Your last name is required to be at least 2 characters. Your last name cannot be longer than 50 characters.
Your email is required.
Your phone is required. Your 10 digit phone number is required.
Your state is required.
Your age is required. Your age must be greater than 18. Your age must be less than 100.

By clicking on the "Contact Me" button above, you consent, acknowledge, and agree to the following: Our Terms of Use and Privacy Policy and to receive electronic communications. We take your privacy seriously. That you are providing express "written" consent for Debt.com or appropriate service provider(s) to call you (including through automated means; e.g. autodialing, text and pre-recorded messaging) via telephone, mobile device (including SMS and MMS - charges may apply), even if your telephone number is currently listed on any internal, corporate, state or federal Do-Not-Call list. Consent is not required as a condition to utilize Debt.com services and you are under no obligation to purchase anything.

By clicking on the “Contact me” button above, you consent, acknowledge, and agree to the following: (1)That you are providing express “written” consent for Lexington Law Firm, Debt.com or appropriate service provider(s) to call you (including through automated means; e.g. autodialing, text and pre-recorded messaging) via telephone, mobile device (including SMS and MMS – charges may apply), or dialed manually, at my residential or cellular number, even if your telephone number is currently listed on any internal, corporate, state or federal Do-Not-Call list; and (2)Lexington Law’s Privacy Policy and Terms of Use and Debt.com’s Terms of Use and Privacy Policy. Consent is not required as a condition to utilize Lexington Law or Debt.com services and you are under no obligation to purchase anything.

About Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

Share a Comment / Leave a Reply

%d bloggers like this: