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Comment Re:Who says there is a loss? (Score 1) 768

(Disclaimer: These figures are for a standard commercial loan. I have no idea whether repayments differ substantially for Stafford/Perkins/PLUS/whatever.)

Standard student loan repayment plans are 10 years. If the borrower is on this income based repayment, and their income is very low with respect to their debt, their monthly payments could be as low as $5 per month -- at which rate not even the interest is covered, so this hypothetical student would never pay off their loan. After 20 years of such payments, the borrower will have paid back $1200 of their loan(s), and the remainder would be forgiven. Of course, not every borrower qualifies for IBR, and you can assume that in 20 years, the majority of borrowers who DO qualify will find better jobs, or get married and have joint income, and so be forced to make larger and larger payments as their income increases...the reality (as mentioned by someone else) is that very few borrowers will see their debt forgiven under this program.

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