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$0 IBR Payments – Should I
June 24, 2019
12:52 pm

Hello Sherpa et al, hoping you can advise.

I currently have just under $100,000 in student loan debt (about $80k of which is principle). I’m on the IBR plan, and since I only make ~$20,000/year, my monthly payments have been set at $0 for the last few years. I do not expect to make significantly more in the coming years. However, living very basically, I could afford to pay something on my loans each month – not much, but say $100/month. It feels irresponsible to be sitting with so much debt and not be putting every penny I have toward paying it off. But these small regular payments are just going toward interest and don’t really make a dent in my debt.

Is it advisable in this situation to be putting everything I have toward my loans, even if my payments are set at 0 and I expect to still have debt left to be forgiven after 250 more “payments”? Is there a political possibility that loan forgiveness could be cancelled for past borrowers? Are there other (hidden) concerns I should be considering with regard to continuing with just base IBR payments (currently 0)?

Thanks for your time and consideration!

June 24, 2019
1:33 pm
Forum Posts: 357
Member Since:
May 3, 2014
sp_UserOfflineSmall Offline

If the debt is going to be forgiven, it really doesn’t make sense to pay $100 per month on the loan. Yes, the interest will continue to accumulate, but a strategy to optimize student loan forgiveness may be the best approach.

One thing you might want to do with that money you can spare is to start saving for the big tax bill that comes with student loan forgiveness.

You can read my thoughts on the planning and strategy here: https://studentloansherpa.com/preparing-ibr-tax-bomb-student-loan-forgiveness/

Best wishes!

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