I finally got my student loans sorted out. I have 3:

UMD 1: $2,315.76
UMD 2: $38,044.87
RWU: $26.475.41

For a grand total of $66,836.04

Anyways, my payment for the UMD1 loan is fairly small, only $40 a month, so I always make that payment, no problems. The problems came in when it was time to start paying back my big loans.

I am currently enrolled in something called the Income Contingency Plan. How it works is this: They take the amount I make at my job yearly, before taxes, and then calculate a percentage of how much I can “afford” to pay each month. It worked out great when I had $25,000 in loans and was only making $14,000 a year. I literally paid $7.00 a month! And I wasn’t worried about “never” paying off the total amount, because the ICP comes with a 25-year max payout. What that means is after keeping my account in good standing and making monthly payments for 25 years, whatever remains after that 12th month of the 25th year, is forgiven. Whoo-hoo! So, even though I had a good chunk to pay, the IRC Plan worked for me.

Now, however, I’m still on the ICP and I still get the bonus of the 25-year max payout. But the problem is now that I owe a while lot more, and now that my salary is a little bit bigger, my payments are a little bit bigger, too. And I just don’t have it in my budget (even if I cut back on some things) to come up with another $300 a month right now.

But here is the good news. Turns out, because my salary is so, well, crappy, I qualify for a 12 month deferment called Economic Hardship. Under this deferment, no monthly payments are required for 12 months, at the end of which, I can reapply for another 12 months if needed. As a bonus, about $15,000 of my loans will not accrue interest!! Yay! And in months when I have some extra money, I can still make a payment of any amount onto the loans to help keep the interest rate from stacking up too much. This is perfect!
I won’t get charged full interest rates, I can still make payments, but there is no required minimum, and this doesn’t affect my enrollment in the ICP. Even though I am getting a 12 month deferment on repayment, I am still enrolled in the ICP and still get those benefits, as well as the 25 year max payout option.

I cannot tell you how relieved I am to know this is all sorted out and the scary men won’t be knocking on my door for money I don’t have!