LogFAQs > #974656426

emblem-man posted...

Interesting. A brief look up shows that the amount you pay on the income repayment plan is based on discretionary income (AGI - 150% of poverty level). With the current plans, if your income rises significantly, your payments would then be higher correct?

In what situations would someone actually be making payments for 20 years? If their income stays low and if their loan is so big that the income based payment increase from higher salary still doesn't pay off the loan?

Yes, this plan raises it to 225% of the poverty level, and then your monthly payment goes up from there, but by much less than the previous plan. Starting July 1, 2024, there will be even more cuts, with your monthly payment being 5% 9fnyour discretionary income instead of 10%.

Essentially yes. It's possible that your monthly payment is so low that it only pays for your interest without touching the balance. While the balance should never go up, it might stay the same if all you are paying is accrued interest (and remember that any unpaid interest is erased each month). That would mean that a $30k loan may not be paid off in 20 years if the min monthly payment is only $30 and only covers interest. But the whole $30k remaining will be forgiven after 20 years.