Why are people complaining about crushing debt when there's IBR?

[zaprowsdower]

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@cormy3

The Grad Plus loan is offered basically to any graduate school regardless of their family’s financial situation.

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<p>And has an interest rate of 7.9%.</p>

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You will be just as good as anyone else who makes their loan payments on time, in fact better, because there is a much better chance that you WILL make those payments on time.

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<p>If your payments aren’t even covering the interest owed, and you have high-interest loans, then the amount you owe will be rapidly and constantly increasing, which doesn’t help your credit rating at all.</p>

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So no, you will not be paying more in the long-term unless having IBR there makes you a spendthrift and pay the minimum payment even though you have the means and would have paid more with the tougher terms of a non-IBR loan.

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<p>Right, but if you can afford to pay the normal amount, then you wouldn’t need IBR. And if you subsequently end up deciding to pay more than the minimum, you’ll still have to pay more because of the larger amount of interest that accrued while you were on IBR. If you pay the minimum required by IBR, you will almost invariably end up paying more, and in many cases end up with a lot of taxable “income” if and when the loan is forgiven. Here are several illustrations, none of which really deals with the more dire situation faced by most TTT law school grads:
<a href=“http://www.projectonstudentdebt.org/files/pub/IBR_forgiveness_ex.pdf[/url]”>http://www.projectonstudentdebt.org/files/pub/IBR_forgiveness_ex.pdf&lt;/a&gt;&lt;/p&gt;

<p>Which is not to say that IBR is a terrible option, since that’s still a better outcome than default or deferrment. But it’s not an option that should cause anyone to disregard the enormous debt they may incur by going to law school.</p>