Make 120 payments:
- Must have been made after October 1, 2007
- Must be on-time (no later than 15 days after the scheduled due date)
- Must be made each month, satisfying in full the installment amount due for that month
- Pay As You Earn Plan (not available on parent Direct PLUS Loans or Direct Consolidation Loans that paid a parent PLUS Loan)
- Income-Based Repayment (IBR) Plan (not available on parent Direct PLUS Loans or Direct Consolidation Loans that paid a parent PLUS Loan)
- Income-Contingent Repayment (ICR) Plan (not available on parent Direct PLUS Loans or Direct PLUS Consolidation Loans)
- Standard Repayment Plan with a 10-year repayment period
- Any other Direct Loan Program repayment plan with payments that are at least equal to the monthly payment amount that would have been required under the Standard Repayment Plan with a 10-year repayment period
So here's my issue:
If you make 120 payments on the standard plan, thats 10 years on a 10 year plan. You're loan is paid off and you don't get any forgiven...
Next, lets figure out the Income based. The payments are 15% of discretionary income.
So your discretionary income is:
I used 20k as a rough poverty estimate (its actually closer to 18 but it will go up over time).
So payments=.15*DI and total amount paid over 10 years (I have an average 6.25% rate) is .15*DI*12*1.0625^10
So lets plug in an income and see what we'll get forgiven:
If you have an income of 50 k for those 10 years:
payments=375 per month
You would need to have a loan of over 60,015 dollars in order to get any forgiven.
So in other words...good luck getting shit forgiven. Unless you're one of the few people with loans over 100k or you make a miniscule amount of money for 10 years, you're probably just better paying it off and not worrying about capping your income.