Debt-to-Income Ratio

[CindyLou]

on your student loans, do you not have an interest only or graduated payment option. Those are not usually contingent on income and are spread out over 30 years.

[wvf3]

on your student loans, do you not have an interest only or graduated payment option. Those are not usually contingent on income and are spread out over 30 years.

Yes, there are those options as well. However, Income Contingent offers the lowest payment for me. This all changes in July 2009 when the new law goes into affect. It's a two part law. One is related to "Fair Payments" and the other part is related Loan Forgiveness. With regard to Fair Payments, I don't know the math involved but it will reduce the current income contingent payment from about 15% to about 8% of AGI. Regarding Loan Forgiveness, I work at a non-profit institution which will qualify me for this program. So after 10 years of payments if there is any balance left it will be forgiven (tax free I might add). It's one of the few bills that have come through recently which doesn't favor corporate interests but is helpful for the middle income folk who have a lot of student debt.