Page 13 - October 2022 Issue.indd

Income based repayment plans have
been a major catalyst for the ballooning
of student loan debt. Many borrowers’
payments under the IBR plan are not

sufficient to cover the required principal

and interest so the deficiency gets added Because you deserve qqualified, llocal representation
to the balance. Assume the required
principal and interest payment for the when managing life’s important issues.
loan is $100. But because the borrower’s
income calculation allows them to only ? ESTATE PLANNING
pay $50 per month, there is a shortage ? RESIDENTIAL & COMMERCIAL 300 Market Street
of $50 per month which is added to REAL ESTATE AND SETTLEMENTS Suite 104
the balance owed. This is the vicious Denton, Maryland
cycle many student loan holders find ? LLC FORMATION & BUSINESS LAW 21629
themselves in. Making payments but ? MUNICIPAL & ENVIRONMENTAL LAW
their balance continues to grow, also ? GENERAL LEGAL COUNSEL 410.310.1774
known as negative amortization, or as I Our attorney, Patrick Thomas, and our Settlement shayman@mlg-lawyers.com
call it “spending less, owing more.” www.mlg-lawyers.com
Agent, Sandy Hayman, are available to travel to your
Here again President Biden comes to preferred location.
the rescue. To avoid this problem in
the future the federal government will
You may recall that several months To those of you who did continue to
cover the unpaid balance avoiding the
ago I advised those with student loans make payments even though you weren’t
problem of negative amortization. I refer
should continue to make payments required to, I say “Oops, I am sorry.” But
to this plan as “pay what you can, forget
since interest was waived and everything do not be dismayed. President Biden has
the rest.”
that was paid would go to principal. a solution for that. All payments that you
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