If anon is in the US, they can switch to a SAVE plan which would make their monthly payments zero and get the loan discharged after 20-25 years. It’s not much, but it’s something.
You pay a percentage of your income, but 225% of the federal poverty guideline is subtracted from your income before the calculation is made. If you haven’t paid off the loan within a certain timeframe (I believe 10 years if you have $12,000 in loans or less, 20 years if it’s more but you didn’t go to grad school, or 25 years otherwise) the loan is discharged, but you have to treat the discharged amount as taxable income for the year it’s discharged. Also, if you make your monthly payment ($0 for anon), your loan doesn’t accrue interest that month.
If anon is in the US, they can switch to a SAVE plan which would make their monthly payments zero and get the loan discharged after 20-25 years. It’s not much, but it’s something.
Can you explain a bit more for us non-americans? You pay 0 and after 25 years it’s written off? Why doesn’t everybody do that then?
You pay a percentage of your income, but 225% of the federal poverty guideline is subtracted from your income before the calculation is made. If you haven’t paid off the loan within a certain timeframe (I believe 10 years if you have $12,000 in loans or less, 20 years if it’s more but you didn’t go to grad school, or 25 years otherwise) the loan is discharged, but you have to treat the discharged amount as taxable income for the year it’s discharged. Also, if you make your monthly payment ($0 for anon), your loan doesn’t accrue interest that month.
Ah ok that makes more sense, thanks for explaining!