I have question about the John R Justice Loan Repayment Program. I have contacted my lender (The Federal Government Direct Loan servicing Center) and it appears that this program will be completely useless to people like me with a high loan balance and low income, in fact it is detrimental.

Here is my situation. I'm doing the income based repayment plan with the intention of getting my balance forgiven after 10 years as a prosecutor. I have over $100,000 in federal debt. Now if I get that $2,500 from the program my taxable income goes up, therefore, my payment each month goes up. I don't actually receive that money though, it goes directly to my lender to pay down the balance on my loan. So my monthly payment goes up without me actually receiving anymore income to pay the higher monthly payment.

Now it is true that my balance will go down $2,500 each year but that is only $20,000 over the next 8 years. With my low income and high loan balance I'd have more than that forgiven anyway. If anyone else familiar with the entire income based repayment plan and public service loan forgiveness program can tell me I'm wrong please do. It does, however, appear this program will be useless to me and all prosecutors in a similar situation.

Sorry, I missed this post!

Answer: You may be right. IBR and JRJ may not be complementary, so some eligible applicants may choose one over the other. Our hope is that future loan awards will be larger, but that is up to the whims of the federal government and largely out of our control. So to with the taxable nature of the award.