The dings to your credit are not small — we had a client recently who had four student loan accounts (not unusual at all) and the hit to his credit was 100 points.
You can imagine what a 100 point hit will do especially when it’s unexpected!
The key is to remain on any unused forbearance or get into IBR most likely. ICR and PAYE are available now too although there are some questions about forgiveness under plans other than IBR. We received clarification this week that someone seeking to exclude their spouse’s income can still file a married filing separate tax return and apply for IBR to do so.
While there are two new IDR plans on the horizon that may take effect, we do not expect that you will be able to exclude your spouse’s income – and that’s only one factor. They may also base forgiveness on amounts paid rather than 20-25 years payment history like the current ones. People who have not managed to pay full principal and interest over 10 years may NOT receive any forgiveness despite 20, 25, 30 or more years of payments.
Lot’s of details surrounding what you can do, what is working and what is not, and likely future changes to various programs. We offer strategy sessions for those with more questions than answers. Please consider reaching out to us at 813-258-2808 or info@christiearkovich.com. Or follow the link below to set a session with us. We may not know everything, but after being in this area for more years than I can count and helping to obtain discharge, settlements or forgiveness for so many, we probably can help!