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

[zaprowsdower]

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@cormy3

It is said that private loans may be lower-interest in the short term because of the state of the economy, but in the long-term they’re going to cost more overall once federal interest rate go up. Hence what I said, GradPlus either way.

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<p>They’re probably not going to rise to the point where they’re higher than what you’d be paying on GradPlus, unless you get a terrible rate to begin with because your credit is really bad. GradPlus loans probably only make sense if your credit is horrible or you’re counting on IBR after you graduate.</p>

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In my previous post(s) I just wanted to knock down the strawman that, with the safety and protection of IBR, you would necessarily be paying more in the long-run. That’s not true.

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<p>Well, it’s almost invariably going to be true if you’re on IBR and actually use it. </p>

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I meant in no case will you be worse off with IBR than without IBR.

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<p>Sure, and I think the point, and the answer to the question you initially posed, is that in no case will you end up with what could be called a positive outcome. If you need to use IBR, you will either end up repaying your loans for thousands more than you would have on a normal repayment schedule, and/or end up with a huge tax liability at the end, or not have a huge tax liability because you have few or no assets despite being at least 45. It’s not hard to understand why someone facing one of those scenarios would complain, even if defaulting would be worse. And again, private, non-GradPlus loans aren’t covered, and those account for most of the debt of recent grads.</p>