One of the biggest complaints we receive is in how Deferments, Forbearances and Income Payment Plans are calculated. In all of these examples everything is based on adjusted gross income and does not take into account car payments, mortgages etc.
The reason why is actually pretty simple. First off all this is not your servicer’s decision. These calculations are determined by the Department of Education and Congress and cannot be altered by your servicer.
In addition lets pretend they did adjust the total to account for expenses. One can probably assume the amount would be significantly higher to qualify than what it is now. You have to pick a starting point and no matter what you do it is going to upset someone (and usually many).
Also this would be impossible to determine what is excessive. Let’s use an extreme example. So one person makes 30,000 with a family size of four and has no other debt. Another makes an income of 160,000 but has a car payments on six expensive cars and two houses. This takes their income to 25,000 after expenses. Should they both qualify?
This may be extreme but really when you look at it its a Pandora’s box that should not be opened. All these plans are extremely black and white and unfortunately sometimes people get shut out as a result. But as always the best suggestion is to talk to your Congressman as they are the ones that hold the keys to the change!