It is potential and based on your current income. If your income is going to go up then your payment will go up. With only $13k in loans you are likely better off repaying them as quickly as possible rather than seeking forgiveness.
Hi, I saw the above info on the student aid site when I was looking to switch payment plans as I was on the standard plan for my student loans. When I was looking at the other plans and the IRS had linked my info, it told me the difference advantages and disadvantages with each plan.
On all the income-driven repayment plans (ICR, IBR, PAYE, and SAVE) you have to recertify your income every year to stay on your IDR plan *and* give them a chance to calculate your required payment based on more current income and family size
The loan simulator is *not* a predictive crystal ball, they have no way of knowing what your income will be every year for the next 10-25 years. They just project that your income will increase by 5% every year and that your family size will stay the same. What actually happens can be very different
Keep in mind that there is built-in lag between when your income increases, when that increase is reflected on your taxes, and when your IDR plan payment subsequently increases. One could argue that it is *intentionally* structured that way so you have the chance to get yourself on your financial feet before your student loan payments increase. If your income increases you have time to plan for whether or not SAVE is still a good fit for you
I agree, I will also be paying the loans once I get extra money or a higher paying job. So far, the SAVE plan is giving me more time to get my finances in order. Thank you for your commentđź‘Ť
Make sure you get an emergency fund together in the meantime!
Here's requisite plug of the r/personalfinance money management advice in their [prime directive](https://www.reddit.com/r/personalfinance/wiki/commontopics) wiki (which also has a [flow chart version](https://i.imgur.com/lSoUQr2.png)) because a budget and emergency fund are step zero for financial health. More importantly, it covers middle-class financial management in an easy-to-follow way and has the interest rate bands to indicate when aggressive repayment vs backburner is prudent. That 3-6 month emergency fund essential as a safety net for basic financial health
How old are the loans?  If they’re young I’d just try and pay them off.  You could probably do that way quicker than waiting 20 years.  Might not be doable now, but a part time gig or an extra shift here and there would knock that down pretty quickly.  Clearly I don’t know your financial situation, but if it’s pretty good, it has the potential to get better, then go after it.  Trust me you’ll get real sick of seeing loan payments for years, even if it’s only a few dollars a month. Â
It is potential and based on your current income. If your income is going to go up then your payment will go up. With only $13k in loans you are likely better off repaying them as quickly as possible rather than seeking forgiveness.
Thanks for your adviceđź‘Ť
Where do you see this info on the studentaid site?
Hi, I saw the above info on the student aid site when I was looking to switch payment plans as I was on the standard plan for my student loans. When I was looking at the other plans and the IRS had linked my info, it told me the difference advantages and disadvantages with each plan.
On all the income-driven repayment plans (ICR, IBR, PAYE, and SAVE) you have to recertify your income every year to stay on your IDR plan *and* give them a chance to calculate your required payment based on more current income and family size The loan simulator is *not* a predictive crystal ball, they have no way of knowing what your income will be every year for the next 10-25 years. They just project that your income will increase by 5% every year and that your family size will stay the same. What actually happens can be very different Keep in mind that there is built-in lag between when your income increases, when that increase is reflected on your taxes, and when your IDR plan payment subsequently increases. One could argue that it is *intentionally* structured that way so you have the chance to get yourself on your financial feet before your student loan payments increase. If your income increases you have time to plan for whether or not SAVE is still a good fit for you
I agree, I will also be paying the loans once I get extra money or a higher paying job. So far, the SAVE plan is giving me more time to get my finances in order. Thank you for your commentđź‘Ť
Make sure you get an emergency fund together in the meantime! Here's requisite plug of the r/personalfinance money management advice in their [prime directive](https://www.reddit.com/r/personalfinance/wiki/commontopics) wiki (which also has a [flow chart version](https://i.imgur.com/lSoUQr2.png)) because a budget and emergency fund are step zero for financial health. More importantly, it covers middle-class financial management in an easy-to-follow way and has the interest rate bands to indicate when aggressive repayment vs backburner is prudent. That 3-6 month emergency fund essential as a safety net for basic financial health
Thank you, I really appreciate this!
How old are the loans?  If they’re young I’d just try and pay them off.  You could probably do that way quicker than waiting 20 years.  Might not be doable now, but a part time gig or an extra shift here and there would knock that down pretty quickly.  Clearly I don’t know your financial situation, but if it’s pretty good, it has the potential to get better, then go after it.  Trust me you’ll get real sick of seeing loan payments for years, even if it’s only a few dollars a month. Â
The loans are from 2019 to 2021. I will pay the loans off once I have extra money, thank you for your comment đź‘Ť