Student Loan Bailout

My dearest friend Shannon (public school teacher in inner city Boston) called me the other day to tell me about this program, pure joy!

SINCE I have only WORKED for a 501(c)(3) since graduating from college…several of them actually…and have accumulated a RIDICULOUS amount of student loan debt well into six-figures (thank you law school.)

Graduates Can Find Help Scaling Mountain of Debt

A provision of the College Cost Reduction and Access Act of 2007 that took effect Wednesday reduces the monthly payments of hundreds of thousands of borrowers who qualify for the new Income-Based Repayment plan (IBR). Borrowers who work in certain public service jobs could also have their loan balances erased after they make qualifying payments for 10 years.

At the very least, IBR will lower the monthly payments of people who accumulated significant federal student loan debt but do not have the income to make the payments on the standard 10-year repayment plan. This relief may reach as many as 1 million people, according to the Project on Student Debt. And despite lower payments, they will not be paying their loans off indefinitely — any remaining balance will be forgiven after 25 years of payments.

Borrowers who think they could benefit from IBR should contact their lenders and ask for an application that will authorize the release of their adjusted-gross-income figures from the Internal Revenue Service each year.

The news is even more promising for people working in public service jobs — all levels of government work, teachers in public schools and universities, employees of public hospitals, and anyone working for a 501(c)(3) nonprofit would all qualify. Anyone working in a qualifying job who borrowed from the Direct Loan Program is eligible for loan forgiveness after 10 years, down from 25.

To qualify for forgiveness, borrowers who work in a public-interest position must either have an existing Direct Loan or consolidate a federal loan with a private lender into the Direct Loan Program and make 120 payments after Oct. 1, 2007.

IBR Monthly Payment Amount
Annual Income	Family Size
	1	2	3	4	5	6	7
$10,000	$0	$0	$0	$0	$0	$0	$0
$15,000	$0	$0	$0	$0	$0	$0	$0
$20,000	$47	$0	$0	$0	$0	$0	$0
$25,000	$109	$39	$0	$0	$0	$0	$0
$30,000	$172	$102	$32	$0	$0	$0	$0
$35,000	$234	$164	$94	$24	$0	$0	$0
$40,000	$297	$227	$157	$87	$16	$0	$0
$45,000	$359	$289	$219	$149	$79	$9	$0
$50,000	$422	$352	$282	$212	$141	$71	$1
$55,000	$484	$414	$344	$274	$204	$134	$64
$60,000	$547	$477	$407	$337	$266	$196	$126
$65,000	$609	$539	$469	$399	$329	$259	$189
$70,000	$672	$602	$532	$462	$391	$321	$251

Oh my GOD according to this calculator I could actually start NOT living paycheck-paycheck each month and save money per month on my payments! HOLY CRAP REALLY???? I’M floored with the figure the calculator gave me…I guess working for these non-profits all my life might actually—pay off (at least my loan debt.)