I got my MFA in creative writing eight years ago. Prior to enrolling in the MFA program at Emerson College, I owed something like $8k in student loans. Total. My payments, which I had to start making immediately after receiving said MFA, were $150/mo.

Then the grad student loans kicked in, and my loan company told me that just to keep up with the interest, I'd need to be making $400/mo. payments. This was on about $68k of student loans, which at the time, was almost as big as a mortgage on a small condo in a not-so-nice, but not-so-terrible area of Wilmington, DE.

Um. Yeah.

I was living in a $500/mo. rented condo in a much nicer part of Wilmington, desperately trying to find a job in the post-9-11 market. This is when I first started teaching part-time at UD. I ran through my savings pretty quickly, and by fall was teaching six classes across three different campuses. I also got a case of bronchitis that lasted five weeks, and nearly had a nervous breakdown.

I utilized deferments on my loans, because at least some of them were subsidized by the government - meaning, they paid the interest for me. I kept making payments, even if I could only send in $250/mo., because I didn't want this to come crushing down on me later. During the two years I lived with my parents, saving up for my house, I made really big payments on my loans that knocked out about $4k of the principle while still keeping the interest down. This is also when I managed to squirrel away $10k for my house, pay off my car, and pay down my credit cards enormously. All this while still giving my parents some money toward utilities, groceries, and paying the rent on a storage unit we shared, while also keeping up with my own personal bills, like the loan, the credit cards, the cell phone, and insurance. It didn't hurt that I was signing a lot of contracts during this time, and getting nice chunks of money, which I wisely used for all of the above and my yearly max contribution to an IRA.

After moving into the house, I began to realize how expensive being a homeowner actually was. It didn't hit me until the first summer I lived there, when I wasn't pulling a regular paycheck from UD, had no book money due to me, and couldn't find a part-time job to help bridge the gap until fall. I didn't have any kind of deferments left, but because I'd paid down so much on the principle, the loan company considered that my "monthly payment," and over the past three years, they've been eating steadily away at all of that progress i made years ago.

Earlier this month I called to find out when my "montly payments" would run out. Thankfully, because I have been able to make some chunk payments during this three years of homeownership, I won't begin owing a real payment until October of this year. Which gave me some time to figure out how I was going to cough up $427/mo. toward this insane debt. That's more than half of my mortgage. That's Joe's student loan payment, our car insurance, and our cable/phone/Internet package combined.

I did some digging, and that's when I found out about this new Income-Based Repayment plan, which goes into effect this summer - in fact, you can officially apply for the program as of today. It was designed to help people like me not find themselves in a financial sinkhole from pursuing a higher education. Under this plan, the loan company cannot ask for more than a certain percentage of your income. This also means that on your credit report, your IBR monthly payment would be listed as what you owe them against the total of your debt. (For instance, currently my credit report shows that I owe $427/mo. to my student loans, which really screws up my income to debt ratio.) The best part? If you haven't paid off the total of your loan in 25 years, the rest gets excused. Period. End of discussion.

Even better news for people who work in the public sector, like teachers and social workers and lawyers who opt for Legal Aid over a cushy corporate position. Their loan gets forgiven within 10 years. This is so that people who choose to work in the helping professions don't get penalized for making that decision.

I used the handy-dandy calculator on the IBR info page, and under this new plan, my monthy payments work out to a whopping $50/mo (roughly). Which is more than doable; in fact, I could probably make $100/mo. payments, if I knew it was going to get me somewhere down the line. Currently, sending $100 into a company that assesses me an interest rate of $10/day - yes, EACH DAY - seems futile. The money seems better spent paying down the principle on our home equity loan, or Joe's student loans (in the two years we've been together, I've managed to knock his down by $2k - but he only owed $7k when I became the family accountant). Of course, when we get married, the amount I will owe under IBR changes. You have to reapply every year, so if I have a particularly lucrative book year, like I did when STARLET got made into a movie, my payments would be higher. But if I have slower year, like I did in 2008 when I was out of work for eleven months and only got a small lump sum of book money, then yeah - $50 payments.

The idea that these payments could be forgiven in full within 25 years makes me so happy. Honestly, one of my biggest concerns was that I'd still be saddled with the debt when Joe's and my kids were prepping for college. But this new plan sort of safe-guards me from that, to an extent. At any rate, it's good news all around.

I haven't actually applied to be considered for this program yet, because truth be told, I had to file an extension on my 2008 taxes and haven't completely finished them. That's next up on the list for the summer - finishing my spreadsheet of tax-deductible expenses from the previous year and getting the whole mess to the accountant. But I did want to make sure that those of you who may not be aware of the program could find it here. Also that there's a bipartisan bill in the House of Representatives that would make any loan forgiveness taxed as income, which sort of defeats the purpose of the program to begin with (at least in part). You can read more about that here, and write to your local state rep to fight this bill.

Hope this helps at least some of you!