Defacto IBR or ICR on PLUS loan?
Date: Fri, 02/22/2013 - 12:19
Here’s a thought I’d like to bounce off folks to see if I’m thinking correctly. I have about $200k in PLUS debt. That puts interest alone at about $1,317 per month. I’m not entirely clear on how much my pay can be garnished, 15% or 25%, though it looks like 25%. Anyway, defaulting means that I would, in fact, go onto a sort of ICR/IBR payment arrangement since my payment is limited by pay, regardless of what I owe.
It appears that if the most that can be garnished is 15%, I need to earn $8,780 per month more than the amount that I can earn free of garnishment for it to make sense to not default and if the most is 25%, then my monthly income would need to be $5,268 more than the amount that can be earned free of garnishment for it to make sense to continue to make payments and not default.
Assets aren't titled to me. I appear to still be eligible for forbearance for a couple of more years, could go to school at least half-time for a couple of years, etc.
Am I missing anything? It seems that on one hand I have a problem but on the other hand the folks I owe money to have a far bigger problem.
It appears that if the most that can be garnished is 15%, I need to earn $8,780 per month more than the amount that I can earn free of garnishment for it to make sense to not default and if the most is 25%, then my monthly income would need to be $5,268 more than the amount that can be earned free of garnishment for it to make sense to continue to make payments and not default.
Assets aren't titled to me. I appear to still be eligible for forbearance for a couple of more years, could go to school at least half-time for a couple of years, etc.
Am I missing anything? It seems that on one hand I have a problem but on the other hand the folks I owe money to have a far bigger problem.
What you are missing is that
What you are missing is that if you default your balance is automatically going to jump due to collection fees of up to 24% being added to your account. I do not understand your logic on any of the numbers you have presented above.
Have you consolidated this mess?? Go to www.direct.ed.gov/calc.html Go to the consolidation tab
They get 15% on an administrative wage garnishment. However your loan balance may be subject to being sued which would increase increase your balance again due to court and legal costs and then they could garnish 25%.
Do whatever you can to avoid defaulting.
yes, i consolidated this mess
The loans have all been consolidated and my wife and I filed separately. The payment is now very affordable.