Job Discussion Forums

jm21 · Joined: 26 Feb 2008 Posts: 406

I was just checking out some different repayment options for student loans, and at least through Nelnet they say that effective July 1, 2009 you can put your loans on an income-sensitive plan and if you are unable to repay them by 25 years the remaining balance is forgiven. It seems like with just about any EFL job your loan payments would be next to nothing, and then 25 years later gone? It seems like a pretty amazing deal for someone interested in teaching abroad as a career...anyone know if it's as good as it sounds?

the one thing that has always worried me about teaching in China is the student loans taking a huge portion of my paycheck, but sounds like there might be a solution now. Wonder if there are special rules for those working abroad though.

The Ever-changing Cleric · Joined: 19 Feb 2009 Posts: 1523

jm21 · Joined: 26 Feb 2008 Posts: 406

I'm able to pay my student loans in America but it would be a PITA in China if I had to make full payments. It's been my biggest concern. It's interesting to hear that now there is a possible solution and I thought I'd try to confirm it and let others know about the information. I had thought about teaching in China long before learning about this new program. I just think it might make teaching in China far more accessible to those of us with significant student debt.

On a side-note, I think abundant student loans have been a major factor in the exponential increases in tuition we've seen, and have mired countless graduates in a large debt that is almost impossible to get rid of through bankruptcy and has large penalties for defaulting on. So I can't say I have a huge amount of respect for the system. And I have no qualms about using a government program for what is basically the purpose it was intended for.

China.Pete · Joined: 27 Apr 2006 Posts: 547

Don't know much about the income-based repayment (IBR) option for student loans, either; but given the fact that most of us repaid our loans in 10 years or less, and any excess interest under this program will be added to your principal loan amount after the first three years, you should really compare the net present value of the loan repayments over 25 years before you decide whether it's such a good deal or not. A calculator for doing that can be found at http://www.finaid.org/calculators/ibr.phtml .

But the greatest uncertainty with IBR will probably be when you try to figure your income over a 25-year period. Even in China, your income can vary quite a bit (a range of $4,500 to $45,000 per year is possible). I can also imagine a scenario in which you pay very little for a number of years, and then upon returning home with your newly acquired Chinese wife and kid (because you've decided that that's the best place for your kid's future) being faced with substantially increased payments for the better part of the next 25 years.

jm21 · Joined: 26 Feb 2008 Posts: 406

3 years of law school on top of the 4 year university can really ramp up the student loans. I could afford them in China on a 25 year plan but no way a 10 year. And I know I'm not the only one in that boat. I have friends graduating from college with more debt than me. Tuition of $30+k/year is pretty common anymore. My receptionist's daughter just graduated and paid $45k/year in tuition for college.

Yes, you would definitely have to take a look to the future and plan quite a bit. But it seems like a lot of people on this forum are more concerned with lower hours than making tons of money.

And from a little searching, apparently the loan forgiveness would be taxable? Only the government coudl think up that one.

IT2006 · Posted: Sat Aug 22, 2009 3:39 am Post subject:

jm21 · Joined: 26 Feb 2008 Posts: 406

China.Pete · Joined: 27 Apr 2006 Posts: 547

"The difference between 6.8 and 8.3 to the dollar is pretty significant and I have no idea what things will look like down the road. China has a history of heavily depreciating its currency..." -- JM

Actually, the difference between 8.27 and 6.83 Remnimbi to the U.S. Dollar represents a substantial appreciation of the Yuan. In Dollar terms at least, you would be better off working for the same salary today than you were, say, five years ago. Take a run-of-the-mill university gig, paying �5,000 a month:

�5,000 / 8.27 = $605; but
�5,000 / 6.83 = $732.