As the title states, I am about to finish my PhD with $140,000 dollars worth of student debt. Assuming I even obtain my desired position—a university professor—my salary will be in the upper $40,000. Of course, my summer will be free for supplementary income.

I called my loan servicer and they mentioned that the U.S. Government offers Loan Forgiveness after 10 years of full and on-time payment for the public sector. They also mentioned that my loans may qualify for an Income-Based Repayment Plan.

I suppose my question is as follows: how difficult of a financial situation have I put myself in? I am currently 30 years, not married (and have no prospects), and have no kids. Would $40k/year and an Income-Based Repayment allow me to eat food on a regular basis?

  • Wow! You have pretty big student loands there. I have 20 000 EUR of student loan now in Finland and after starting and finishing my PhD, probably about 30 000 - 35 000 EUR, which is much, much higher than typical Finnish student loan. But then again, you have a lower tax rate. It is not unheard of here to have 140 000 EUR mortgages for 40 000 EUR income; I was recommended at most 160 000 EUR mortgage for my bit below 50 000 EUR income (which will reduce a bit soon due to my PhD studies, so I didn't buy a house). Due to your lower tax rate, you should be ok.
    – juhist
    Dec 26, 2015 at 11:10

1 Answer 1


You can find information on qualifications and a payment calculator for Income Based Repayment here.

Assuming all your loans are qualifying and at 6.8% interest, and your adjusted gross income is $40,000, the calculator gives an estimated payment of $285/month. That's quite a bit less than half the actual interest due. Sounds like a pretty good deal.

  • 3
    Half the interest? The principal keeps rising? I genuinely don't know how these plans work, and am curious. Nov 19, 2013 at 17:39
  • 2
    @JoeTaxpayer I think the Feds pay the remaining interest (no principal). Of course, the amount you pay increases as income (typically) does. Entire balance is forgiven after 25 years, or 10 years for qualifying public sector/non-profit jobs. Nov 19, 2013 at 18:09

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