Tuesday, April 22, 2014

Student Loan Indentured Servitude Update: The Sallie Mae Strumpet 25-Year Anniversary Waltz


Last Wednesday (April 16th), I received one of my periodic electronic updates from Sallie Mae -- that strumpet-for-life with which I'm in a shotgun marriage for life via my gargantuan and unpayable consolidated Direct Loans student loans since it became the servicer provider -- and the update was glorious in its ridiculousness and never-in-a-million-years could possibly happen.

Number of Payments | Payment Amount | Due Date
347| $1,401.01| 06/28/2014
7 | $753.59 | 05/28/2043

Amount to be paid on your loan(s):

Unpaid Principal Balance (includes interest previously added):
$211,742.07

Accrued Unpaid Interest Added to Principal With This Statement:
$38,852.74

Outstanding Late Fees: $0.00 (HUH??)

Total Principal to be Paid:
=$250,594.81


Estimated Total Amount of Interest: + $243,953.79 to be Paid During Repayment (if payments made as scheduled)

Estimated Total Loan Amount to  be Paid:
= $494,548.60
(This amount will click over $500,000 this year.)

Altogether:

"And I'm proud to be an American / Where at least there's a corporate oligarchy, / And I won't forget the vicious overclass that gave that joy to me!!!"

Now I will say that I also had some important news today -- and this followed online researching wondering how much can be garnished from my wage if I defaulted on all of this. The ANSWER: 15 percent of disposable income but NO court order is needed because this is considered an "administrative" garnishment.


It appears as though I have TWO years of remaining availability on my excessive student loan debt forbearance (not sure I understand the rationale behind that but whatever) and ONE year of voluntary forbearance. Thus, I SHOULD be able to go all the way to June 28, 2017 before I have to make a first payment when I'm 47 years old. Thus, I don't have to have any forced conjugal visits with my shotgun bride-for-life for that entire time.

Thereafter, assuming I get into the income-based repayment (IBR), I shall have to pay 15% of my disposable (rather than discretionary) income. Of note, this is precisely the same percentage as the standard wage garnishment amount that the Department of Education has taken upon itself through its 2003 Final Rule.

Based on my 2013 AGI (which, obviously, will change), my monthly payments would be $560 per month (in 2014 dollars) for 25 years.

At that point the debt "goes away" (rather than the 10 years you get under the public service option) -- although you can be sure the IRS will tax that discharged debt as an earning, which would certainly be another 5 years' worth of high payments on an installment plan.

Anyway, 25 years translates into just 300 EASY payments.

While this duration makes the plan as ridiculous and unworkable as the duration AND dollar amounts in the standard repayment plan -- even in that extremely unlikely scenario I would pay 300 x $560 = $168,000 in my current income or about 33 cents on the current 2014 dollar.

That translates into an ABSOLUTE MAXIMUM -- assuming (if) no corporate theocratic fascist state has taken over by then (a big "if").

But I should also point out that in this scenario, by the time the remainder was discharged in late 2042 -- that's 2017 + 25 years -- my total debt load might not have even fallen that much -- if at all.

So think of it as just a fixed amount to pay. Over 25 years.

But, again, exactly what America or the world will be like then is anyone's guess, or how or into what the student loan system will have morphed by that distant year. I'm not going to guess (though I doubt it will be good). More to the point, though, there is probably a greater than 50-50 chance that I'll be dead by then (although I have an idea of moving to New Zealand by then and/or becoming an author of some success).

I WIN!

--Regulus

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