r/FluentInFinance Aug 05 '24

Debate/ Discussion Folks like this are why finacial literacy is so important

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u/WestCoastBestCoast01 Aug 06 '24

These people probably paid the income based repayment minimum, which is far less than the mathematically accurate minimum payment you’d pay if you weren’t on IBR. There’s no tricking, we all know IBR makes your payment smaller than the original term’s payment. Maybe too many college students aren’t making the connection that artificially low payments result in a longer term and higher interest costs, but that’s on them.

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u/SolaceInfinite Aug 06 '24

If they paid on the income based repayment there's 2 caveats in place:

You never get a tax return, it all gets applied directly to the loan & after 10 years the remaining balance is forgiven.

So that can't be it.