This. I'm feeling very comfortable with IBR and 200K+ from lawschool and a good life/balance (read: lower paying) job. In fact, getting the most out of the loan repayment systems available to individuals feels a lot like getting the most out of points/deals opportunities. I think it's using the same brain center.
So you pay some fraction of your income for
20 or 25 years, which will still be hundreds of thousands of dollars, and then the balance is forgiven. Then what?
Somehow I only see the connection between IBR and helping with massive student debt; I don't see how IBR helps after forgiveness and one is still making the same salary...
And that's not even the worst part, as seen below.
Don't forget the IBR tax bomb at the end.
I admit I didn't know about this, but it makes perfect sense. Forgiven loans = income under the Code. Yikes.
So, in reality, you pay for 20-25 years, and then you get hit with a massive tax bomb on the end. Say, for example, one has $75,000 forgiven at the end of the 25 years. That same year, depending on the tax bracket of the individual, he or she could easily be smacked with a tax bill of almost $
20,000--and that's on top of the income tax he or she owes that year AND it's due immediately.
And this is the stuff that should be contemplated before jumping into law school, or indeed any degree.
Either (i) get a full scholarship (whether via the institution, Uncle Sam or Great Uncle Shmulie), (ii) go to a T-14 school (increasing your odds of landing a big law job) or (iii) work in Public Service and have your loan forgiven after 10 years (though that still has the same caveats as mentioned in my first post, though less the tax bomb).
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