Finding the Right Direction Amid Confusion

I’d like to propose a new government agency, DAME: The Department for Appropriate Name Evaluation. Its purpose would be to make sure that all government projects, laws, agencies, etc., had sensible names that told you what the thing is in the least confusing way. I think a little more attention to what things are named would go a long way in helping people make sure they don’t get lost in the mess of bureaucratic mumbo jumbo. It might even help people from getting lost, period! I live in the Twin Cities, for example, and there are two major interstates that cross here: I-35 and I-94. Easy enough, right? Well, as they approach the Cities, they spread out to form this spiderweb of freeways with very creative names: 35E and 35W going north-south, and 94, 694, 494, and 394 going every which way. You can imagine how easy it is to get turned around, even if you’re familiar with the area!

Payment Plans: Different Acronyms, Different Options

Student loans similarly are replete with confusing names that can create detours if you get them mixed up. Payment plans are one area where this is common, and many of their names are very similar. Many payment plans fall under the category of Income-Driven Repayment (IDR), which is the umbrella term used for plans that base your monthly payment on your salary. Within IDR, there are several plans, each with slightly different terms, but often with very similar names (IBR, ICR, or PAYE). If you think of repayment as a road trip, IDR is your route, and the specific plans are the different cars you could take to get there. They’ll all get you where you want to go, but whether you’re driving a Rolls Royce or an El Camino, your costs will vary. 

PSLF: Taking a Shortcut

If student loan repayment is a road trip, the destination is always the same: getting your balance to $0. On an IDR plan, how much you pay for the journey can change, but it always ends at that zero balance. For many, it takes 25 years and ends with IDR Forgiveness, which is a long time to commit to any trip! Fortunately, there’s an alternate route for many borrowers that can cut it down by more than half! Public Service Loan Forgiveness (PSLF) was created by Congress in 2007 and gives workers in the public service sector a shortcut to pay off their student loans in 10 years. After 120 on-time qualifying payments, their remaining balance is forgiven, which can be a game-changer for borrowers working for non-profits, government agencies, and other public service fields.

If you’re interested in finding out whether you could qualify for PSLF, or have other questions about finding the best route for your student loan repayment, give us a call. We’ll put you on the shortest, most effective path toward that zero balance, so you can put your student loans—and all those acronyms!—in the rear view mirror.