Indebted Student Loans

If you’re in the U.S., you’ll be happy to know the government just started offering a new income based repayment plan.

“Yay!”  you say.  Well, before you launch into a happy dance, consider the pros and cons.

The Pro:  If you have a good repayment history, that won’t change with the plan.  Even if you take a lowing paying job that makes meeting your student loan payments more difficult, if not impossible.

The Con:  Typically, it takes 10 years to pay off your student loan.  If you go with the new plan, you could be paying your loan back for a lot longer.  And in that time, your interest continues to grow.  And even if the government forgives the loan, the IRS may not be so forgiving.  What does that mean?  It means they could apply the forgiven amount to your taxable income.

Talk about damned if you do; damned if you don’t!

Food for thought…