Examples of Repayment

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Income-Based Repayment

$100,000 debt @ 6.8% Standard Repayment would be $1151/month for 10 years

Starting Income (AGI)	Annual Increases	Monthly Payments, Year 1	Monthly Payments, Year 10	Monthly Payments, Year 25	Total Amount Paid	Amount Forgiven by federal government after 25 years
$35,000	3%	$246	$321	$500	$107,655	$162,345
$40,000	3%	$309	$403	$627	$135,000	$134,858
$40,000	4%	$309	$462	$893	$166,119	$97,975
$40,000	5%	$309	$526	$1151	$201,650	$48,672
$50,000	3%	$434	$566	$881	$189,688	$68,012
$50,000	4%	$434	$640	$1151	$227,701	$7,951
$55,000	4%	$496	$729	$1151	$213,228	$1,777*

*The debt would be fully repaid by the borrower after 22 years. Nevertheless, there is a small federal write-off because under IBR, the government pays the interest on the subsidized portion of the loan for three years.

Income-Based Repayment with Ten Years of Public Service

$100,000 debt @ 6.8% Standard Repayment would be $1151/month for 10 years

Starting Income	Annual Increases	Monthly Payments, Year 1	Monthly Payments, Year 10	Total Amount Paid during 10 years	Total Amount paid without public service over 25 years (for comparison)	Amount forgiven by federal government after 10 years
$35,000	3%	$246	$321	$33,850	$107,655	$134,150
$40,000	3%	$309	$403	$42,448	$135,000	$125,552
$40,000	4%	$309	$462	$45,701	$166,119	$122,299
$40,000	5%	$309	$526	$49,132	$201,742	$118,868
$50,000	3%	$434	$566	$59,644	$189,688	$108,356
$50,000	4%	$434	$640	$63,710	$227,701	$104,160
$55,000	4%	$496	$729	$72,715	$213,228	$56,019

Resources:

Article: Federal Student Loan Repayment Assistance for Public Interest Lawyers and Other Employees of Governments and Nonprofit Organizations (PDF), 36 Hofstra Law Review __, forthcoming, Fall, 2007). Philip G. Schrag. http://www.law.georgetown.edu/news/releases/documents/Forgiveness_000.pdf

Full text of the College Cost Reduction and Access Act: http://kennedy.senate.gov/imo/media/doc/HR2669_conf_report.pdf