Stay in Repayment When You Can!

I had what I considered to be a very frustrating conversation recently.  As I have described previously, I hate when I sell the Income Plan or another lower plan to a borrower and they prefer to go with a forbearance or deferment.

In this particular example, the woman I was speaking to was not married and had four kids.  From the way she was talking about her income (I did not receive specific numbers) she would have qualified for a very very affordable payment if not $0.00 on an IBR plan.

Here is why this is frustrating:

-Similar to a deferment, an IBR or PAYE plan pays your interest on subsidized loans for the first three years

-It will keep you in a plan that is based on your income once you establish a more stable and higher income

-It starts the clock on debt cancellation for you

-It keeps you in repayment

The last reason to me in the most important.  Being in repayment should always be the goal especially if it will yield the same or similar results to a deferment/forbearance.  You have to pay your loans off at some point (even through forgiveness) and the only way to do this is by being in repayment.  If you avoid repayment it will only eventually lead to you being out of options and most the time being in a worse place than where you started.  So whenever possible if the option to stay in repayment is viable please take it!