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Thread: Graduating from college with almost no debt

  1. #26
    God/dess Gia2608's Avatar
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    Default Re: Graduating from college with almost no debt

    Quote Originally Posted by lynn2009 View Post
    I paid off my student loans.

    Deferments, income based repayments are meant to be temporary, to make payments manageable until someone gets metaphorically back on their feet. Some people rely on IBR forever because the total amount, principal and interest is forgiven but the forgiven amount is taxable income. Also IBR and forgiveness only applies to federal loans. And if you have no income your IBR payment will be zero but you need to prove you are unemployed and apply for it. If you stopped paying your loans months ago they've already torched your credit.
    Thanks for the clarification. I agree; however if someone has defaulted on their loans but then gets on a schedule again, even if it is 0 per month, their credit score will eventually rebound once lates have seasoned off.
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    God/dess Zofia's Avatar
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    Default Re: Graduating from college with almost no debt

    The whole forgiven amount of the loan is considered income and taxed accordingly. Thus, if you apply for loan forgiveness in the amount of $10,000 and your federal tax rate is 28%, you will immediately owe the U.S. Treasury $2,800. My thought is, if you cannot pay your monthly payments on a loan, you probably can't pay the tax on having it forgiven.

    Your plan appears to be even worse, you are defaulting without seeking IBR or loan forgiveness. The lender will add on late fees and interest until they make a claim on the Treasury if it is a Guaranteed Student Loan. The U.S. will pay off the lender and then sell your account to whatever bottom feeder collection agency bids the highest for it. They may or may not pursue you to the ends of the earth, but you can bet that the U.S. Treasury will. Also, if you have any Social Security built up, when you go to claim that, guess what, the Treasury will garnish it.

    So, you plan better be to quit the country and never ever come back. Not a good plan, by the way.

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  4. #28
    God/dess DonaDiabla's Avatar
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    Default Re: Graduating from college with almost no debt

    Actually, I have a unique situation here.I got student loans in the past but I decided to pay my own way for real estate and paralegal degrees. Currently, I am paying for my past degrees and worked out a payment plan. Paying off your student loans is pretty painless if you talk to them and workout some sort of payment plan.
    Wolves may lurk in every guise / Now as then, 'tis simple truth / Sweetest tongue has sharpest tooth.

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