Entering Repaye before graduation.

[wakaflakaflocculus]

So I tried to enter repaye before graduation and consolidate my loans in order to enter repayment earlier at a low rate and receive the interest subsidy. Unfortunately, the process only went through on my grad plus loans which are not in school status and the DIRECT LOAN STAFFORD - UNSUB in school loans are still in a standard repayment schedule and haven't had the 6 month period waived yet due to not having graduated yet.

According to these directions. https://www.whitecoatinvestor.com/how-to-enroll-in-repaye-early/ maybe this is ok?  My plan now is to add the in school loans once I graduate to the consolidation package like is described in the post above and then apply to repaye again for the loans not included.  Does this seem correct?  I am frustrated this process seems to incentivize the wrong things like delaying entering repayment. I also am curious if your monthly repayment is zero dollars why not to enter repaye even earlier on the gradplus loans during the fourth year of medical school to receive the interest subsidy.

 

[FutureDoc]

Hi!  Author of that post here.  I personally filed everything before graduating and it worked out fine, that being said I now recommend people wait until after graduation, because you end up in this exact situation.

Your plan is correct, you just send the "add loans to consolidation" form in to your new servicer and everything should process.  As long as the initial consolidation went through and the consolidation loans are enrolled in REPAYE, there is no additional IBR paperwork when you add loans to the consolidation.

 

You are also right that the earlier you consolidate the earlier you can get the interest subsidy.  That being said, for most of the fifty-ish students & residents I have talked through the process just getting the single form done is plenty challenging. That's why I now reccomend just doing it after graduation, so the process is a single step.

 

Hope that helps, happy to answer other issues!

[Ben]

You are correct, you can't enter repayment on loans in "in-school" status, you have to wait until you graduate. You can indeed file for a consolidation add-on once you graduate to add your new loans.

Since months of repayment can translate to loan forgiveness early on, the government is probably wise not to allow students to "repay" their loans with an indefinite number of calculated $0 payments while in school.

If you have old loans for undergrad etc, you can indeed do what you ask:

From the PSLF Q&A: https://studentaid.ed.gov/sa/sites/default/files/public-service-loan-forgiveness-common-questions.pdf

21. If I return to school and qualify for an in-school deferment on my Direct Loans that are in repayment, can I decline the deferment and make qualifying PSLF payments while I’m in school?

Yes. You may decline an in-school deferment on your loans that are in repayment status and make qualifying payments on those loans while you are in school. Remember, in order for your payments to qualify for PSLF, you must be employed full-time by a public service organization while you attend school. Note: If you receive new Direct Subsidized Loans or Direct Unsubsidized Loans when you return to school, you will not be able to make qualifying PSLF payments on those loans while you are in school. Any new Direct Subsidized Loans or Direct Unsubsidized Loans you receive will not enter repayment until the end of the six-month grace period. Although you could voluntarily make payments on your new Direct Subsidized Loans and Direct Unsubsidized Loans while you are in school or during your grace period, those payments would not count toward PSLF.

This makes sense for old Grad Plus or other unsubsidized loans. A lot of people's undergraduate loans are subsidized and thus there would be no REPAYE subsidy to get for those as there would be no accrued interest.

 

[wakaflakaflocculus]

Thanks futuredoc.  The initial consolidation and repaye did work so hopefully when I add the loans to the consolidation at the end of May within the 180 days it will all automatically be added to repaye and the grace period waived.  The add loans form doesn't have anything about the waiving the grace period or repaye on it so I am just a little concerned about that.    I'll keep you updated.