If you are a teacher in New Jersey you probably have a lot of student loans, since you had to go on to graduate school for a master's degree if you wanted to keep your job.  As a result, you most likely have a loan balance well in excess of $30,000.  Trying to make those payments and have the professional life you dreamed of can therefore be tough.

The good news is, it doesn't have to be!  There is a way for every teacher with high federal student loan balances to make an affordable payment and still be finished paying in ten years.  How?  By using a combination of an income based repayment plan and the Public Service Loan Forgiveness program.

A Lower Payment

As to the payment plan, let's say you are married, have no children, and are filing separate tax returns.  You have $50,000 in loans (Stafford, Perkins and Graduate PLUS) at 6.8% interest, and your spouse has none.

In a standard, ten year fixed plan, your monthly payment would be approximately $575.40.  But in an income based repayment plan like IBR, with an Adjusted Gross Income of $50,000, that payment would be approximately $341 (over $200 per month in savings)!

But the Same Ten Years

But wait, there's more! Ordinarily an income based plan like IBR would take 25 years to repay your loans.  But through the Public Service Loan Forgiveness program it could still be as short as ten years!

Through this program, if you make 120 payments on your loans, each during a time when you were employed full time as a teacher (or some other form of public or charitable employment), you can apply to have any unpaid balance on your loans discharged tax free! On top of that, any qualifying payment made on your student loans after July 1, 2007, counts towards the 120!

How Can I Find Out More?

If you are a teacher, this is just too good a deal to pass up. If you live in southern New Jersey and would like to consult with me on your loans and how to get into this program, please feel free to call my office at 856-432-4113 or contact me through this site to schedule an appointment in my Woodbury office to discuss your case.

If you would like more information about student loans, you can dowload my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.

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Steven J. Richardson
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Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.