At the time, I had about $110,000 in student loan debt thanks to the bait-and-switch of the University of Akron School of Law and, well, the high cost of higher learning anyway. This seemed like the thing. I checked the rules--the program required that you are making regular, standard payments or that you were enrolled in an income-based repayment plan. At the time, Carly and I had a pretty low communal income, so I qualified for a lower payment under the income-based plans. I enrolled, and off we went.
The first year went fine. Made payments, did my job for USCIS. The second year, magically, my payments spiked--almost doubled. I called to inquire. There had been some rules changes. Now, your income-based plans are based on your total household income. I argued, that was absurd! My wife only made a little more than I did, and she had crippling student loans also. So her payments would double, also. How can we fix that? Answer: file our taxes married-but-separate. This felt wrong. People do that when they're getting divorced, or one of them is being audited. So we took the risk, filed our taxes goofy, and payments went back to tolerable levels.
The following year, there were rules changes again--this time, income-based repayments were still pegged to your total income, but would be offset by your spouse's student loan debts, also. Great! Back to filing jointly.
Three more years pass and I finally get about to being admitted to the Ohio Bar. I wanted to maybe make good on that legal education and got certified so I could apply for some lawyer jobs. Part of the new lawyer training required by the state of Ohio included a seminar on financial management. I chose the one about repaying student loans--I figured, why not? Should be an easy one and maybe I will learn something. I did.
Under recent rule changes (around 2012), certain types of loan programs that had been discontinued (and I don't know the reasons) were not eligible for loan forgiveness. And I had one of those loan programs. Brilliant... five years of payments out the window. How to fix it? Re-consolidate the loans. Get on the proper payment program.
I re-consolidated and asked a lot of questions. Will this payment plan be eligible? Is this the correct kind of loan? Yes, yes, yes. At the time, one of the income-based payment plans was the extended loan term--25 years instead of 10 years. We had just had the Wolf, and Carly was out of work, so our income was low enough to qualify for that extended plan. We both rejiggered our loans and thought that was great.
Then, last year, in hopes of making federal loans easier to pay back for everybody, Congress passed an amendment to the program to allow any person to get an extended loan term, regardless of income. So this payment plan was no longer income-based. Which means that I was no longer in the loan forgiveness program. Another three years down the tubes.
I called my loan servicer and asked what I could do. Under the current rules, with my income, I would have to pay at least double my current payment in order to qualify for the loan forgiveness program. And that payment would be higher than if I was under a standard, ten-year payment program. So, effectively, they're telling me I should be paying off my loans before the term is due, based on my income.
Essentially, I have been hedged out of the program. I've been working in the government for almost 8 years and one of the incentives I had to start is just... gone. Sure, I have a great job. I get paid plenty. I have little to complain about. But I feel cheated. Maybe I could have gone over to the private sector a long time ago, gotten more significant experience, started working on things that I really want to do instead of the things I've kind of fallen into. It's disheartening at a time when I don't need to be disheartened.
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