Day: 2012/10/11

IBR Formula ‘Cracked’ on the Am Law Daily

It’s actually really easy, just required a trip to the Dept. of Health and Human Services’ Web site. However, I learned quite a bit in the process, especially how much income debtors need to avoid loan cancelation (answer: more than most law grads make). Check it out:

Income-Based Repayment: Lifeline for Law Graduates, Certain Loser for Government

One important mea culpa: Unpaid interest on IBR loans does not capitalize onto loan principal as I’ve stated elsewhere, so very few people will be paying hundreds of thousands of dollars in income tax 20 years into repayment, unless they borrowed, like, more than $500,000 and didn’t pay any of it back.

Another tidbit I learned is that a fraction of debtors might have lower monthly payments on a 25-year repayment plan than IBR, provided they don’t get laid off or suffer a wage loss.

Now, you must trip to this sugarlump.