Very interesting article, Nick. I question the monthly repayment numbers, however. Your chart assumes that 10% of gross income goes towards student loan repayment. Recent income-based repayment plans allow for much lower loan repayment rates. I have a friend who makes a little over $30K per year and he will have to pay zero dollars on his $45K student loan.
A single person has to hit about $33K in AGI before needing to make any payments under the new REPAYE plan. At an AGI of $50K, the maximum payment is still under 2% of AGI.
I don't know if the majority of outstanding loans qualify for these income-based repayment plans. Do you have any sense of this?
Yes. I agree with you. I have seen some of this also. I didn't dig into it, but I think there is a 12 month temporary protection program that started 10/1/23. It will be interesting to see in the next 60-90 days what proportion of those with student loans begin to pay in full, or in part, or not at all.
Very interesting article, Nick. I question the monthly repayment numbers, however. Your chart assumes that 10% of gross income goes towards student loan repayment. Recent income-based repayment plans allow for much lower loan repayment rates. I have a friend who makes a little over $30K per year and he will have to pay zero dollars on his $45K student loan.
Nerdwallet has a student loan repayment calculator - https://www.nerdwallet.com/article/loans/student-loans/discretionary-income-calculator
A single person has to hit about $33K in AGI before needing to make any payments under the new REPAYE plan. At an AGI of $50K, the maximum payment is still under 2% of AGI.
I don't know if the majority of outstanding loans qualify for these income-based repayment plans. Do you have any sense of this?
Yes. I agree with you. I have seen some of this also. I didn't dig into it, but I think there is a 12 month temporary protection program that started 10/1/23. It will be interesting to see in the next 60-90 days what proportion of those with student loans begin to pay in full, or in part, or not at all.