Curious if anyone can help me with this one:
I have about $160k in debt. 150 months of payments. Currently sitting on SAVE.
My income for the next year or two will be very low because I’m a business owner who got destroyed by COVID, so I have some decent accrued losses.
But then after that, could be $200k or more a year as my income.
I’m struggling a bit with deciding if RAP makes sense or going back on IBR does.
On the one hand, for the next 2-3 years if I go RAP…relatively low payments, interest getting waived.
On the other hand, I’m already halfway to forgiveness.
It seems like if I go RAP and my income kicks up quickly enough, I’ll pay the loans off a bit before forgiveness anyway. Seems like that might make sense purely for the interest mitigation.
Whereas if I go IBR, I’ll have interest for a few years and then if my income goes up enough…I’ll also still likely pay the loans off shortly before they forgive.
But I’m not sure if I’m thinking correctly here.
IBR vs RAP for Someone Halfway to Forgiveness With High Income Potential
byu/Apptubrutae inStudentLoans
Posted by Apptubrutae
1 Comment
Keep in mind the RAP months won’t count towards forgiveness if you end up switching IDR plans off of RAP later.
If your ultimate goal is forgiveness and you think RAP isn’t the long term solution then I wouldn’t use it.
I would come up with a plan and model out the remaining months and see what looks best.