Why I’m Not Concerned About My $120,000 Student Loan Debt

by Andy Hough on August 6, 2012

While I was in law school I racked up about $100,000 in federal student loans.  Since I finished law school my debt has risen to about $120,000 due to accumulated interest.  Going into this much debt wasn’t smart, but I’m not concerned about the debt.

The reason I’m not concerned is because I am on the Income-Based Repayment Plan.  You can read more about the this plan at IBRinfo.org Income-based repayment caps monthly payments at 15% of your monthly discretionary income. Discretionary income is defined as the difference between adjusted gross income (AGI) and 150% of the federal poverty line based on where you live and your family size.  Based on my current income I’m not required to make any monthly payments.  That will probably change next year since I will be single.

Under IBR payments are made over a period of 25 years.  Any debt remaining at the end of 25 years will be forgiven.  That means I have about 22 more years until my loan will be paid off or forgiven.  There is also a 10 year public service loan forgiveness option that I could use if I were to obtain a public service job. This program rewards those who go into public service fields like nursing, law enforcement, and public interest law services by creating a sliding scale that determines how much I would pay each month. The amount that I would end up paying every month depends on my overall financial situation and the size of my family. Under this program, I would pay a reasonable amount every month and the rest of the payment amount is forgiven. To maintain eligibility for public service loan forgiveness, I would need to have a federally insured student loan, hold a public service job for 10 years, and make 120 payments during those years.

Some might think I should be doing everything possible to pay off this debt.  I’m not concerned about the debt though since the payments are capped at 15% of my discretionary income.  Therefore, the payments should always be easily affordable.  I’m not deliberately keeping my income low to avoid paying back the debt, but I’m not going to take just any job to pay off the debt either.

There is a risk that I will end up paying more on my debt under the IBR than using the Standard Repayment plan.  This is because the payments are spread out over 25 years resulting in a lot more interest.  I think this risk is acceptable considering the current benefits of this plan.

Do you think it is smart to use the IBR plan or do you think it is stealing?  What do you think?

 

1 Bridget August 6, 2012 at 10:21 am

Why the hell did you borrow $100,000 if you had no intention of ever paying it back??? That IS stealing!

2 Kurt @ Money Counselor August 6, 2012 at 11:39 am

If the taxpayers would be re-paying “forgiven” debt, then in my view you should definitely be aiming to repay it yourself. Is the job market that poor for people with law degrees? Or perhaps you have a disability of some sort? What exactly is preventing your from working, if that’s not too personal a question?

3 Jason @ WSL August 6, 2012 at 12:20 pm

I agree that it’s stealing…sorry.

I think it’s absolutely wrong to try to string the payments out beyond 25 years and allow the tax payers to fund your college. I know you’re doing pro bono work (or were) but it doesn’t mean you shouldn’t pay your obligations.

4 Jacob @ iheartbudgets August 6, 2012 at 12:28 pm

I feel like there is a bit more background story to this, so I’m not rushing to any judgements. Sounds like you’re going through a divorce or breakup of some sort. In your “About” page you state all your lawyer work is pro bono. Is there a reason for that? Also, why is it that you are living in your van? Just curious, because there’s definitely more to your story :)

5 pat August 6, 2012 at 12:51 pm

You didn’t make the rules, you are just following them. I don’t have a problem with you.

I have a problem with the rule makers. Those that thought these rules would be fine for me the tax payer. I, also, have heard of law school recruiters that encourage the young to get big loans because there are so many high paying legal jobs. Surprise, surprise you graduate and those 100k jobs don’t exist. But, your debt does.

6 Andy Hough August 6, 2012 at 3:18 pm

It is a poor market for people with law degrees. I haven’t yet been able to get a job using my law degree. I did interview for a job last week that I think I have a good shot at getting.

7 Andy Hough August 6, 2012 at 3:20 pm

The government offers the option for people in my position. I don’t see how using a repayment plan in the way it was intended is stealing. Perhaps they shouldn’t offer such a repayment plan, but since they do, I have no qualms using it.

8 Andy Hough August 6, 2012 at 3:23 pm

I am going through a divorce right now. The reason I’m doing pro bono work is because that is the work I can get and I figure getting some experience will be beneficial. I’m not living in my van yet, but will be soon. I’m doing that because I want to, not because I have to. It should allow me to keep my expenses low.

9 Andy Hough August 6, 2012 at 3:24 pm

If these rules didn’t exist I probably wouldn’t have taken out as much in student loans. I can’t say that my school deceived me about getting a high paying legal job, but I did think I’d be able to find at least a decent paying legal job.

10 Andy Hough August 6, 2012 at 3:26 pm

I’ve never said that I have no intention of paying it back. When I get a decent paying job I will start making payments on the debt. In the meantime I’m using the repayment method that was designed for people in my situation.

11 Marissa @ Thirty Six Months August 6, 2012 at 7:52 pm

What kind of law degree do you have? I always assumed that doctors and lawyers will always have a job.

12 Andy Hough August 7, 2012 at 9:39 am

A law degree is a J.D. in the U.S. and that is what I have.

Doctors will always have a job because the AMA limits the number of medical students. There are no limits on law students which has lead to way more lawyers than jobs.

13 Aaron Hung August 7, 2012 at 12:44 pm

Interesting, haven’t heard of this. So what if you want to buy a house or something, it’s gonna affect you right?

14 Andy Hough August 7, 2012 at 1:03 pm

It doesn’t affect me as far as my credit score since I’m in good standing. It might affect my ability to get a mortgage due to the overall amount of debt. It doesn’t matter currently because I don’t have sufficient income to purchase house.

15 Carrie Hough August 7, 2012 at 8:24 pm

It is not a poor market for people with law degrees. Going through a divorce doesn’t make you cripple. It the lack of responsibilities and motivation.
Yes, I am the soon to be ex but I can say this, for the past 5 months I have continued to build my business, enrolled in college to put myself through, while working, raising a daughter (Not Andy’s) and be responsible for everyday life. Which includes rent car repairs, other bills and everything else.
At 45 years of age, and not having a job of some sort to pay back your debt, is stealing, and laziness.
There are families that struggle everyday, but work.
It seems to me that you are asking for approval for your bloggers to say, it is ok to do as you want.
Living in a van, traveling where ever you want is not responsible, it is running away.
Jobs are out there, in fact I know of a couple law firms that would have hired you here in Springfield, if you would have taken the time and sent your resume in, but have you told your viewers that?
I have restrained from saying too much on here, but when you are asking your viewers to give you their opinion, make sure you tell the facts about it.
I am going back to school, to enhance my education and build my business to a higher level, I will work hard and as a single mom I will stand tall, and if receiving any government aide, I will return by helping my community and build the dreams of a teenager.

Stealing… yes! If everyone thought the way you do, then the hope of child’s dream my never happen, because they won’t have the opportunity, because there won’t be any funds for them.

It is a sad article to read, when selfishness is involved.

16 Carrie Hough August 7, 2012 at 8:29 pm

Sorry for the grammar errors, wrote in frustrations.

17 Toni Boillot August 7, 2012 at 8:53 pm

Andy Andy Andy..Really ! Do you realize just how ignorant you sound? I had a student loan when I went to cosmetology school 37 years ago. I had to write and let them know I was not able to pay back right away but that I did not forget that I owed this loan. When I sold my house the 1st thing I did was write a check with a note thanking them for their patience. I did this without any hesitation & I sure didn’t have to ask if anyone thought it was ok.Your 45 years old…YOU decided to leave your marriage and your just to damn lazy to get a REAL job. With all the law suits out there you can’t tell me that you can’t find a job. I only hope that our wonderful goverment catches up with you & opens up your eyes. You are selfish & self centered. I hope you get everything you deserve in life which is nothing..

18 Bridget August 8, 2012 at 12:39 pm

*applauds*

19 Bridget August 8, 2012 at 12:42 pm

You’re in a self-imposed “situation”.

You have a high-earning degree and choose NOT to use it.

You have income-generating assets (you’re continuously listing dividend income) and choosing NOT to use it to pay down your debt.

You have nothing but time to work, and are choosing NOT to.

You are stealing from tax-payers of your country, to fund an education you don’t even use. It’s awful. I think you should be ashamed of what you’re doing and make every effort to change your behavior.

20 Michelle August 9, 2012 at 2:43 am

Wow ! I bet your mother is one proud lady!
You have put more work into “how not to have to pay off your huge debt” then to being a honest hardworking American that sucks it up and does the “right thing ” and gets a job and pays off their debt. It personally took me over 10 years to pay off my college loan and it sucked having to pay it off but I didn’t see it was a option “not ” to pay or to “get” around paying my debt that I borrowed.
It amazes me how many people you have lied too in your personal life and on here!
Your a complete fraud and con artist on here. Your loyal “fans” on your site should really be mad all the BS you have fed them .

21 Andy Hough August 9, 2012 at 10:10 pm

Comments are closed due to the personal attacks that aren’t appropriate for this forum. You can comment on this topic on a new post if you like, but any excessively nasty comments will be deleted.

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