Note the following. This student loan thing is NOT what we think it is. Much has been done to address it. Max payments of 10% if discretionary income and max pmts of 25 years after which balance is forgiven. But forgiven debt is income according to IRS which is always a surprise .............
2011: President Obama issues an executive order making the new version of income-based repayment available to borrowers two years earlier. To be eligible, borrowers may not have any loans from before 2008 and must have at least one loan in 2012 or a later year.
2010: The Health Care and Education Reconciliation Act of 2010 (P.L. 111-152, 3/30/2010) created a new version of income-based repayment. The new version cuts the monthly payment by a third, to 10% of discretionary income, and forgives the remaining debt after 20 years in repayment instead of 25 years. The new version is effective for new borrowers as of July 1, 2014. Borrowers with previous federal student loans as of June 30, 2014, are not eligible for the improved income-based repayment terms.
2007: The College Cost Reduction and Access Act of 2007 (P.L. 110-84, 9/27/2007) added income-based repayment as an option within both the FFEL and Direct Loan programs. This repayment plan bases monthly loan payments on 15% of discretionary income, with discretionary income defined as the amount by which adjusted gross income exceeds 150% of the poverty line. After 25 years in repayment, the remaining amount owed is forgiven. This yields a lower monthly payment than the income-contingent repayment plan. The use of 150% of the poverty line as a threshold aligns the repayment plan with standards for bankruptcy fee waivers.
whoops, only 20 years of payments.
But the snow flakes want ZERO repayments.