Is it Stupid to Rely on the Public Service Loan Forgiveness Program?

[11Q13]

I have 40k in debt from undergrad

If I got to my number 1 choice for my Master's I'll have 50k more....no clue about the PhD yet.

I will almost definitely be going into a qualifying field, either as a professor (yes it counts), or working for an NGO. I will also use income based repayment to make sure the payments aren't too high once I finish. So why shouldn't I take out all the loans I need and just count on this program?

[rooster34]

I have 40k in debt from undergrad

If I got to my number 1 choice for my Master's I'll have 50k more....no clue about the PhD yet.

I will almost definitely be going into a qualifying field, either as a professor (yes it counts), or working for an NGO. I will also use income based repayment to make sure the payments aren't too high once I finish. So why shouldn't I take out all the loans I need and just count on this program?

The danger with relying on this program is that you have to make 120 payments (10 years worth) and work for a qualifying institution for 10 years. Most, if not all, gov't loans are paid back over 10 years to begin with. As such, if you don't use an income based plan you will have paid off the entire balance by the time you qualify. Now, if you, like me, have loans from undergrad on which you've already been paying, the story is slightly different. For the most part, payments made after 1 Oct 07 count. Do a quick google search and you will find more information.

[aginath]

The danger with relying on this program is that you have to make 120 payments (10 years worth) and work for a qualifying institution for 10 years. Most, if not all, gov't loans are paid back over 10 years to begin with. As such, if you don't use an income based plan you will have paid off the entire balance by the time you qualify. Now, if you, like me, have loans from undergrad on which you've already been paying, the story is slightly different. For the most part, payments made after 1 Oct 07 count. Do a quick google search and you will find more information.

Careful with broad, sweeping statements. Many folks I know, including myself, are on 20-25 year repayment plans for their loans. I had a state loan that was on a 10-year repayment schedule, but my federal loans had more options.

As for the OP, consider the PSLF as an option, but by no means should you rely on it.

[mmm35]

I would double check the requirements. I was looking at this the other day, and I think that you have to be on the 10-year repayment plan in order to qualify. Or on income-contingent. If your payments are set up to take 20 years they don't let you stop in 10 years (then everyone in public service would set the loans up for 20 years). I think the requirements were on the direct loan servicing site, but it took a little digging to find them.

[thekidisalright]

The requirements are 120 payments at either the standard or income-based(contingent) plan. (Source: http://www.finaid.org/loans/publicservice.phtml)

Also, check out this calculator: http://www.finaid.org/calculators/icr.phtml.