Partial Financial Hardship

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A Partial Financial Hardship exists when the annual amount due on all of a borrower’s eligible loans, as calculated under a standard 10-year repayment plan, exceeds 15 percent of “discretionary income.”

Public service employees with a relatively high student debt-to-income ratio will readily qualify. A recent law graduate with typical student debt practicing as a civil legal aid attorney will easily demonstrate a Partial Financial Hardship. For example, a single person with an adjusted gross income of $48,000 will be able to choose Income-Based Repayment if he or she owes about $35,000 in federal student loans.

 

Approximate Maximum Adjusted Gross Income (AIG) Needed to
Qualify for Income-Based Repayment at Specified Debt
*
Assumptions: Interest rate = 6.8%; 2009 Poverty Guidelines;
Household size of 1 residing in 48 contiguous states.

AGI Debt
$20,848 $5,000
$25,451 $10,000
$30,055 $15,000
$34,658 $20,000
$39,261 $25,000
$43,864 $30,000
$48,467 $35,000
$53,071 $40,000
$57,674 $45,000
$62,277 $50,000
$66,880 $55,000
$71,484 $60,000
$76,087 $65,000
$80,690 $70,000
$85,293 $75,000
$89,896 $80,000
$94,500 $85,000
$99,103 $90,000
$103,706 $95,000
$108,309 $100,000
$112,912 $105,000
$117,516 $110,000
$122,119 $115,000
$126,722 $120,000
$131,325 $125,000
$135,929 $130,000
$140,532 $135,000
$145,135 $140,000
$149,738 $145,000
$154,341 $150,000
$158,945 $155,000
$163,548 $160,000
$168,151 $165,000
$172,754 $170,000
$177,357 $175,000
$135,929 $130,000
$140,532 $135,000
$145,135 $140,000
$149,738 $145,000
$154,341 $150,000
$158,945 $155,000
$163,548 $160,000
$168,151 $165,000
$172,754 $170,000
$177,357 $175,000

*Source: Jeff Hanson, Ph.D. , Director of Borrower Education, Access Group, Inc.

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