^^ I think the problem is that in the past she wasn’t required/expected to make payments, now she is. So, if wage garnishment or ?? is in the future, then that will be a problem.
I’m surprised that during her divorce that the part of her loans that was for childcare wasn’t dealt with in a shared manner.
@SOSConcern
Yup, there’s a local TAMU campus in Laredo. It focuses mainly on education and international business.
What happens in the loan forgiveness process while she is getting in those work years? I suspect she won’t be able to continue delaying when she is in that forbearance and they just go after everything. It would be interesting to hear about someone in forbearance and what that truly means - it may get some people realizing they want to start paying, get a second job etc, so they don’t live ‘that life’.
For PSLF, you have to make 120 on-time payments under one of the approved repayment plans (standard, graduated, IBR, PAYE, or ICR). Periods of deferment or forbearance do not count. So if you start paying your loans in 2010 and in 2012 you do two years of deferment for a master’s degree, your loans won’t be fully forgiven until 2022.
I know some people who have done forbearance. It’s not that bad - it’s sort of akin to deferment. It doesn’t necessarily mean you totally stop paying; you can request a reduction in your monthly payment from your loan servicer for a period of time, or you can request no payments. (Any months you spend in forbearance obviously don’t count towards the 10 years of PSLF or the 20 years of regular forgiveness.) But you only get 12 months of forbearance and interest continues to accrue on the unpaid debt.
I hang around some graduate forums, and my experiences in there has made me a really strong proponent of limits on how much can be forgiven under federal lending programs. I’ve been in forums where people have discussed wanting to attend very expensive master’s programs in social work or education, and others have encouraged them to just borrow as many federal loans as they want, knowing that they can get the public service loan forgiveness. There’s basically no incentive for, say, a prospective MSW student to choose his or her inexpensive local public regional over a fancy private university that really offers no additional value in that particular field.
We don’t know that they weren’t. The loans were in her name, so they remain her responsibility no matter if she used the loans to pay for family expenses (which the child care would have been) or for education expenses. The court can’t order the lender to look only to the ex for payment of these loans, as they are in wife’s name. Maybe the court gave an equal amount of debt to the ex husband to pay off, or maybe the wife received more of the assets of the marriage (home equity, household goods). The wife may have received a higher child support award because she had a lot of debt but the truth is she signed the documents. It’s her debt…
The reality is that there was probably plenty of debt to share but not a lot of assets to split. He had student loans too, and his may have been used for family living expenses too.
my advice is max out all the loans you can get and invest in playing the powerball lottery!
(sarcasm)
How about fantasy football??
If she dies the ten year reduced payments…and the “balance” is forgiven…she will,have to pay taxes in the amount that is forgiven, there are no free rides.
My guess…she will just be in default…if she can’t make $5000 a month in payments.
If she does the cancellation…she will,have huge issues the year she is done and has to pay taxes on the forgiven amount,which likely will far exceed her income. And the IRS isn’t forgiving at all.
jym626 fantasy football is not a good idea, lottery is a much better bet.
Maybe she can just sell her soul, zobroward.
Unless her estate still has any assets left at death, those taxes will become a moot point along with any other remaining debts. Unless one has assets left in one’s estate at the time of death, my understanding is one’s debts…including taxes are effectively nullified at death.
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Doesn’t sound like she has assets. Seems like the divorce was the result of losing assets. And, it’s not likely she’s accumulated assets since then.
What year was the divorce? You’d think the amount of debt would have been brought up at that time.
Nope, no taxes on the public service forgiveness program, only on the 20+ year programs.
@twoinanddone could all of this debt be subject to the public forgiveness program?
Most likely not. If any is private, it wouldn’t be forgiven. There are different rules for loans taken before 2007, but even those just changed with the REPAYE program. It’s impossible to know from the information given, the loans may have consolidated, etc. She’s a long way, 20 or 25 years, from having the loans forgiven the ‘taxable’ way as she’s been in deferral, and one has to make payments for the required number of years before forgiveness.
And I believe the person has to make full payments for the required number of years…and then the balance is forgiven. Correct??
Seems like the way out is to pay 10 years of reduced payments … which seems much less than futile. She would be 62 and could be debt free (I think) and start saving for retirement. She should also find a better paying job and a lower cost of living to make ends meet. At some point, she would at least get her full social security payments and can move into an even lower cost area … what is the issue with taxes ?
When you get a bill with 186K on it, you know you are in deep trouble … and start working on a solution. Why not do the 10 year public service back then. She should be able to find a public school job … no ?