Undergraduate > Graduate Loans

sk8rmom
Sun, 18 Jul 2010 14:10:37 +0000

I’m pretty sure that the 2014 change to 10% IBR is for those who take out their FIRST federal loans (not just their first graduate loans) then. I’m sure you can google it and come up with the exact wording. You should probably do more research into how IBR works as I believe the income considered also includes your (future) spouse’s earnings, but not THEIR student loan obligations…or something like that! So it may not be the good deal it appears to be in terms of actually lowering monthly payments.

You have to also consider that it’s always risky to borrow money based on unknown future income levels…and the longer the payment period, the higher the risk. Federal programs and terms change quite frequently…so there’s no guarantee that in 6 years, 15 years, or 25 years these programs will exist in their present form or that you will be able to qualify for them. Although they’re going into fields where they would be very likely to qualify for IBR and PSLF, I don’t intend to allow my kids to borrow more than I feel they could reasonably handle on a standard repayment term simply because I know that, without parent loans, I can likely afford to help them out if they have periods of unemployment or unusually high expenses. In other words, I view IBR and loan forgiveness as a “fall back” position more than something to count on because, at the end of the day, you and your mom are going to be on the hook for every dime if these plans don’t work out for you. As a parent, your mom can and should be able to figure out the bottom line for your family and set reasonable limits on college spending.

I get the sense that you don’t realize how difficult it is to maintain a household, family, vehicles, etc. and are underestimating the limits that outstanding debt will have on your future choices and lifestyle. I think you and your mom should very carefully prioritize your educational goals and needs separately from your “wants” and then weigh them both against the cost of various options (I don’t think ED is a good thing if affordability is questionable). In any case, you absolutely should reflect on the impact that higher debt loads will have on your lives and the sacrifices you will have to make in the future in order to accomodate your wishes now. There are many students who find themselves surprisingly happy at their affordable, lower-choice schools and many who are miserable about the debt they accumulated for their dream schools.