Are Income Driven Repayment Plans a Scam for Federal Student Loans?

Question: Dear Steve, Hey there. I’m eligible for Income based student loan repayment of $0, but I can’t find anything that actually tells me what that means when I’m not paying any money towards the loans. Right now I’m paying around $70 a month, so what’s the catch of $0? Melissa Answer: Dear Melissa, The … Read more

I Missed Recertifying My Lower Student Loan Payment and My Interest Was Added to the Balance

Question: Dear Steve, I wonder if you can help. I’ve had my Nelnet loans on auto-pay for a couple of years. 2 months ago I received notice to re-certify for the income based repayment plan, but I did not see the emails (went to my junk folder). This month I was kicked off the plan, … Read more

How Can I Avoid a Big Tax Bill in 25 Years on Forgiven Federal Student Loans?

Question: Dear Steve, I am paying the minimal payment for the REPAYE payment plan to the federal government. My yearly pay is merely 12 K per year. My debt is 100 K with all of the interest added. If my student debt should be erased in 27 years, how will that impact my taxes when … Read more

Will My Inheritance Increase My IBR Student Loan Payment?

Question: Dear Steve, I have about $70,000 in student loans, currently on income based repayment and my payments are zero because of my current income. My mom has me as her sole inheritor. Her lawyer (who has since passed) told her the government won’t touch my inheritance when she dies. I think the exact opposite. … Read more

I Made a Mistake and Filed a Joint Tax Return and My IBR Payment is Going to Go Up

Question: Dear Steve, I have a school loan that seems to have doubled and right now I owe almost $69,000. I have been enrolled in the IBR plan and also work for a school district so I am enrolling in the Public Service Forgiveness Plan. My question is that I filed taxes as “jointly” with … Read more

How Can I Keep My Federal Student Loans Out of Default When I Can Barely Afford to Live?

Question: Dear Steve, I have defaulted on a direct federal consolidation loan. I was a teacher but had an on the job accident and I am no longer able to stand to teach. Luckily, I was a career change person and have been able to find a job in another industry (not public service related) … Read more

Alternative Repayment Plan – The Little Known Federal Student Loan Plan When All Else Fails

For individuals struggling to repay their federal student loans and think the only repayment options are a Graduated Repayment Plan, Extended Repayment Plan, Revised Pay As You Earn, REPAYE, Pay As You Earn, PAYE, Income Based Repayment Plan, IBR, Income Contingent Repayment Plan, ICR, or Income Sensitive Repayment Plan. For Direct Loans there is also … Read more

Bankruptcy Groups Jump In to Support Student Loan Discharge to Avoid Cement Life Preservers

The National Consumer Bankruptcy Rights Center (NCBRC) and National Association of Consumer Bankruptcy Attorneys (NACBA) have decided to support the bankruptcy discharge in ECMC v. Murray with an outside briefing supporting the effort. The Murray case is very interesting in that the bankruptcy court agreed a substantial part of their student loan debt should be … Read more

Income-Driven Repayment Plans for Managing Crushing Levels of Student-Loan Debt: Financial Suicide

By the end of his first term in office, President Obama knew the federal student loan program was out of control. Default rates were up and millions of student borrowers had put their loans into forbearance or deferment because they were unable to make their monthly payments. Then in 2013, early in Obama’s second term, … Read more

Income-Driven Repayment Plans for Distressed Student-Loan Debtors: Not a Silver Bullet for Easing the Student Loan Crisis

by Richard Fossey & Robert C. Cloud. The federal student loan program is in crisis. More than 40 million Americans now have outstanding student loans totaling almost $1.3 trillion and 8 million borrowers are in default (Cao, 2016). As reported recently by the Brookings Institution, in the for-profit college sector, default rates are especially high. … Read more

Income-Driven Repayment Plans for Distressed Student-Loan Debtors are Insane

In a recent post, I wrote about Alan and Catherine Murray, who won a partial discharge of their student-loan debt in a bankruptcy case decided in December 2016. Educational Credit Management (ECMC), the creditor in their case, is appealing the decision. We should all hope ECMC loses the appeal, because the Murrays are the poster … Read more

My College Loans From 1994 Keep Increasing. I’ll Never Pay Them Off.

Question: Dear Steve, I graduated college in 1994 with $21k in federal student loan debt. Long story short, 23 years later, after several deferments, forbearances and start and stop payments due to different financial circumstances, I now owe over $108,000!! What can I do? Is there any chance of a settlement or partial forgiveness? Pat … Read more

I’m 72 And Wondering if The IBR is the Smart Thing to Do

Question: Hi, Steve, I have been diligently reading your column for years and saving some material relating to seniors with student loan debt. I will be 72 next month and am still working and getting social security. I have been managing my ever increasing student loans with the most current strategy IBR. I am 7 … Read more

Do You Think I Could Eliminate My Federal Student Loans With the Brunner Test? – Leslie

Question: Dear Steve, I am going to provide a timeline of events and circumstances leading up to my current situation. I apologize if it’s too long but I think the circumstances are important to my case for loan discharge and I desperately need advice: 2009-2012: Attended the Illinois Institute of Art – Chicago (a branch … Read more

Who is Reputable to Help Me Get My Student Loans Forgiven? – Bella

Question: Dear Steve, I graduated in 2007 with $90,000 in loans… since then i have been having babies and working very minimum and my loans were in forbearance. Now they are $160,000 and completely unaffordable. I cant even cover the monthly interest rate at this point let alone the actual loan. Do you know of … Read more