I wrote a post about law school loan forgiveness and income based repayment back in March. At that time both were still proposals but back in October they became official after being passed by Congress.
It is nice to know that if I do 10 years of public service that my law school loans will be forgiven. It is even nicer to know that my loan payments will be capped at 15% of my income above 150% of the poverty level and any remaining balance will be forgiven after 25 years. I hope I’m not still paying on my student loans in 25 years but it is good to know that my payments will be capped at a level I can easily make.
The only drawback is that if I have loans forgiven they will be treated as income for that year. That would most likely result in a huge tax bill. I’m not going to worry about that for now though. If it appears likely that I will have my loans forgiven than I’ll come up with a strategy for dealing with the taxes at that time.
Do you ever wish that you didn’t go back to school? With such a large debt load, would it of been easier just to get a “normal” 9 to 5 and just save up?
This is great news for all my friends going into public interest law!
Now if they would just set up a similar program for us social workers. Unless you work in very specific fields (usually with kids, especially child protective services) you have to pay back 100% of your loans. When I graduated from my master’s program, my salary was about $31k and my loans well above $36k. Now that’s depressing!
Sonya Ann- The debt load won’t be that much of a problem. I’ve never wanted to have a “normal” 9 to 5. I could have had my school mostly covered by scholarships if I had chosen to. Not going that route probably was a mistake.
Fit Wallet- This program is not just for law school graduates. It is for anyone with federal student loan debt which would include social workers. The program started Oct. 1,2007 so they might have only 9 years to go. Visit this site for more information on public service loan forgiveness.