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IBR w/ heavy debt, switch to REPAYE?? Help!!

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  • #16




    I too am surprised that many borrowers, eligible for both IBR and PAYE, chose IBR over PAYE. Recently I saw an early federal fact sheet on PSLF stating that for most borrowers IBR would be the best plan. I guess people followed that out-dated advice Thankfully the new materials are updated to reflect better advice.

     
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    Same here.  I think it has to do with the window that occurred from before PAYE was on the table (2006-7 or so, I think?) and the "new" IBR which came into play for new borrowers after, um, 2014 I think.  AFAIK the "new" IBR is basically PAYE with the monthly payment being 10% of the disposable income instead of the prior 15%.  Maybe this was done to prevent confusion with RePAYE?




    Myfedloan counselor told me that REPAYE is only effective for the first three years for the unsubsidized fed loans with 50% interest subsidy benefit. After 3 yrs, they were adamant that there is no interest benefit…counselor was pretty positive about it. I thought this plan will stay until Gov removes this plan.
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    You are not the only one who has reported that their loan counselors have told them this.  This is directly in contrast to what the federal regulations state.  I know that we're not on the "inside" and they are, but given the clear official statements to the contrary by the Dept of Ed, I (and the pros on the site) really think those individual counselors are incorrect in their assessments.

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    • #17
      I talked to the myfedloan manager-level person who said that under REPAYE for unsub, after 3 yrs, there is no interest subsidy benefit. That is why I was confused. We will see after 3 yrs, I guess...

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      • #18




        I talked to the myfedloan manager-level person who said that under REPAYE for unsub, after 3 yrs, there is no interest subsidy benefit. That is why I was confused. We will see after 3 yrs, I guess…
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        I want you to find out who this person/people is/are and ask them if they've read page 24 of this document: https://studentaid.ed.gov/sa/sites/default/files/income-driven-repayment-q-and-a.pdf

        And see if their opinion changes because it's really quite plainly stated. If that isn't the case, then a lot of experts which talk online about this subject, which include WCI and many of the advising professionals who post here, and amateurs who think they know a couple things like me, are making ill-advised decisions.

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        • #19




           


          PMed yspower with MyFedLoan contact.

           

           

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          • #20
            I too am considering switching from IBR to REPAYE and just spent 20 minutes on the phone with FedLoan. Initially the CSR was unaware of the unsubsidized loan subsidy. She spoke to a supervisor and was then able to confirm that there is a 50% subsidy on interest not covered by the monthly payment on unsubsidized (and subsidized after the 3-year period where you get 100%) loans for an indefinite period while on REPAYE.

            In my situation as a fellow with almost three years of training remaining, this translates into a very nice $400+/month benefit. It does seem like switching from IBR to REPAYE is a no-brainer for those of us with high debt burdens that are still in training.

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