Author Topic: Income contingent plans and US Fed student loan forgiveness  (Read 3391 times)

DancingDan

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Income contingent plans and US Fed student loan forgiveness
« on: February 14, 2015, 12:39:13 AM »
Does anyone have information about student loan forgiveness after 20 years of repayment in the income contingent plan?

I am having difficulty with the US Fed Student Loan service company. They are giving me the run around about producing documents that track my payment plans over the last 15 years.

They seem to be saying that, because the Fed has used 3 different service companies, no one has the historical documents at their disposal. I wonder if anyone else is having the problem, and if so, how you dealt with it.

Thanks
Daniel

FYI - here is a link to explanations of this type of plan and the forgiveness associated: https://studentaid.ed.gov/repay-loans/understand/plans/income-driven
« Last Edit: February 14, 2015, 12:41:23 AM by DancingDan »

Spondulix

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Re: Income contingent plans and US Fed student loan forgiveness
« Reply #1 on: February 14, 2015, 12:49:04 AM »
Are you sure you're eligible? That page says loans disbursed after 2007.

Tabaxus

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Re: Income contingent plans and US Fed student loan forgiveness
« Reply #2 on: February 14, 2015, 12:14:33 PM »
You probably have a lot of loans outside of the eligibility period for forgiveness if you've been in repayment for 15 years.  Should probably do additional research.

Good luck to you.

LadyStache

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Re: Income contingent plans and US Fed student loan forgiveness
« Reply #3 on: February 14, 2015, 01:01:49 PM »
Be aware that forgiveness can be costly:
Quote
Under current Internal Revenue Service (IRS) rules, you may be required to pay income tax on any amount that is forgiven if you still have a remaining balance at the end of your repayment period for an income-driven repayment plan.

LadyStache

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Re: Income contingent plans and US Fed student loan forgiveness
« Reply #4 on: February 14, 2015, 01:15:01 PM »
If you've been paying these off for 15 years, you're probably only eligible for forgiveness after 25 years of on-time payments. Obama wanted to reduce it to 20 years, but I think that was only for individuals who took out their loans more recently.

DancingDan

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Re: Income contingent plans and US Fed student loan forgiveness
« Reply #5 on: March 16, 2015, 02:53:12 PM »
Apologies for late reply. Thanks everyone for your responses. My issue with this process is that the current loan processing organization that handles federal student loans in repayment is not very cooperative or knowledgeable in the whole forgiveness process. I have been trying to access records of the last 15 years that indicate my payment plans. For some reason they claim that this information is not available. I'll keep trying and report back with any progress.

Take care,
Daniel

CheapskateWife

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Re: Income contingent plans and US Fed student loan forgiveness
« Reply #6 on: March 16, 2015, 03:07:38 PM »
If you've been paying these off for 15 years, you're probably only eligible for forgiveness after 25 years of on-time payments. Obama wanted to reduce it to 20 years, but I think that was only for individuals who took out their loans more recently.

And that drives me crazy...its no real loan forgiveness!  After 25 or even 20 years, you should have those things paid off anyway, so after 20 years of solid payments, will there really be anything to forgive?  In my case, there certainly was not.

GetItRight

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Re: Income contingent plans and US Fed student loan forgiveness
« Reply #7 on: March 16, 2015, 09:20:21 PM »
This is a good lesson that for all accounts you should save the monthly statement as PDF, or scan the statement to PDF if you get a paper statement. Keep your own records for everything and have good backups. Most lenders will not keep those records forever for either practical (cost) reasons or because it's a liability, likely both. They will keep your records for somewhere between a convenient and legally required amount of time and no longer.

As for loan forgiveness? I suppose there's two ways to look at it. It's either money the government steals at gunpoint to give you because you won't do your own dirty work or it's a refund of part of the money they have stolen from you. Which way depends on how much they have stolen in taxes from you vs the "forgiven" amount.

johnny847

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Re: Income contingent plans and US Fed student loan forgiveness
« Reply #8 on: March 16, 2015, 11:32:47 PM »
And that drives me crazy...its no real loan forgiveness!  After 25 or even 20 years, you should have those things paid off anyway, so after 20 years of solid payments, will there really be anything to forgive?  In my case, there certainly was not.
This is possible for somebody who doesn't earn much for 20-25 years and repays these loans with an income based repayment plan. Though I don't know when IBR plans actually became available - I think they were instituted more recently, but I'm not sure about that.


This is a good lesson that for all accounts you should save the monthly statement as PDF, or scan the statement to PDF if you get a paper statement. Keep your own records for everything and have good backups. Most lenders will not keep those records forever for either practical (cost) reasons or because it's a liability, likely both. They will keep your records for somewhere between a convenient and legally required amount of time and no longer.

As for loan forgiveness? I suppose there's two ways to look at it. It's either money the government steals at gunpoint to give you because you won't do your own dirty work or it's a refund of part of the money they have stolen from you. Which way depends on how much they have stolen in taxes from you vs the "forgiven" amount.
Looks like I need to pour myself a drink for the taxes = theft drinking game.