Is it reasonable to expect the government will hold their end of the deal through income-driven repayment programs?
I am currently crunching in some numbers for dental school. I am using this website to make my projections:
For my calculation, I am using 400,000 as a ballpark of what it costs to attend a non-instate dental school. For income, I am using an estimate of $140,000
Standard repayment plan - $532,898 paid over 10 years
New IBR - $417,256 paid over 20 years with $462,744 forgiven
That 462k does entail a tax bomb of about 185k, which brings total payment to 602k. However, using an estimate of 3% annual inflation, I estimate that the present net value of that 602k will be about 300k in 2017 dollars.
Of course the caveat is that the government will forgive almost half a million dollar of debt.
It's going to be hard to sleep at night for anyone carrying those loans. For one, what if the government doesn't honor the deal or cap the forgiveness? Second, it doesn't feel right for tax payers to carry the burden of paying off loans for professionals making well over six figures.
So what does reddit think. Is it reasonable to plan your future around income-driven forgiveness programs?
Submitted May 14, 2017 at 02:27AM by 90smule http://ift.tt/2reG7Ip
