Celebrating 10 years! 2007-2017

Fed Stud Loans Repayment Plans

I have 4 federal student loans, unconsolidated. Some are di ginganinja12/30/16
You don't want a repayment plan with no fixed end date. IBR qdllc01/05/17
I'll echo what qdllc said. IBR is superior. notthedroidyo01/05/17
Doesn't PAYE have a lower percentage you have to pay, as wel goorange88801/05/17
IBR or bust. Safest route and when you get married, unlike P mtobeinf01/05/17
You can't do married filing separately with PAYE? mtbislife01/05/17
From what I recall, the spouse's income is considered with y mtobeinf01/05/17
I believe this only applicable to REPAYE, and not PAYE. goorange88801/05/17
First, PAYE and IBR both have fixed end dates (i.e., 20 or 2 anonattempt01/05/17
REPAYE is only 10% of your income above the poverty line vs. thirdtierlaw01/05/17
Not married at the moment but would PAYE be better if your s mtbislife01/05/17
Look at it this way with IBR. PAYE is going to be gutted, i mtobeinf01/05/17
Makes sense, thanks. mtbislife01/05/17
I believe he was going to gut all the plans and roll them in thirdtierlaw01/05/17
You can always switch back and forth between IBR and PAYE or fettywap01/05/17
I have almost a decade into IBR. If I moved to payee to try zodd01/06/17
It shouldn't, if you are making payments under any of the pl thirdtierlaw01/06/17
It seems that IBR has a cap of the Std. 10 year monthly paym ilovethelawjk01/06/17
Precisely. It's not there. mtobeinf01/07/17
Right, then you just change plans. The biggest advantage I n thirdtierlaw01/07/17
No. Changing programs does not restart the clock. fettywap01/06/17
Do you have a source you can provide on this matter? I belie goorange88801/06/17
34 CFR 685.209 & 34 CFR 685.221 Scroll way down to the lo thirdtierlaw01/06/17
There and if you look through the student loan information p fettywap01/07/17
So, if you marry someone with a high salary, or make more mo ilovethelawjk01/08/17
Possibly. I gave my 2 cents based on what I could recall of qdllc01/09/17

ginganinja (Dec 30, 2016 - 9:23 pm)

I have 4 federal student loans, unconsolidated. Some are different than others (direct vs. stafford, etc.). Am I able to consolidate some of them, but not all of them? Also, can I have multiple repayment plans? The reason I ask is because some of my loans qualify for PAYE while others qualify only for IBR. I'd like to get the loans that qualify for PAYE on that repayment plan if possible, without jeopardizing my IBR on my other loans. Thanks for any tips.

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qdllc (Jan 5, 2017 - 6:46 am)

You don't want a repayment plan with no fixed end date. IBR before PAYE in my opinion.

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notthedroidyo (Jan 5, 2017 - 9:04 am)

I'll echo what qdllc said. IBR is superior.

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goorange888 (Jan 5, 2017 - 9:10 am)

Doesn't PAYE have a lower percentage you have to pay, as well as earlier loan forgiveness compared to IBR? I will be faced with choosing between these two in a couple of months ($200k in debt) and I assumed PAYE would be superior.

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mtobeinf (Jan 5, 2017 - 9:30 am)

IBR or bust. Safest route and when you get married, unlike PAYE, only your income is considered so long as you file separately. For PAYE spouses income is grouped in regardless. IBR may pay a little more but even in these tumultuous times, it'll be subject to the fewest, if any, degrees of change.

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mtbislife (Jan 5, 2017 - 10:52 am)

You can't do married filing separately with PAYE?

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mtobeinf (Jan 5, 2017 - 11:09 am)

From what I recall, the spouse's income is considered with your own regardless of tax filing status. Don't quote me on that though. All I know is once I read something along those lines, wasn't even an option anymore.

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goorange888 (Jan 5, 2017 - 1:28 pm)

I believe this only applicable to REPAYE, and not PAYE.

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anonattempt (Jan 5, 2017 - 9:37 am)

First, PAYE and IBR both have fixed end dates (i.e., 20 or 25 years, depending on whether you are a "new borrower"), so I'm not sure what QDLLC is referring to.

Here is some helpful info: https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven

PAYE is generally superior, except for the two caveats mentioned - IBR is less subject to changing in the future (although I have hedged my bets and am on PAYE) and IBR is better for married life.

Your situation may also vary depending on whether you took out loans prior to 2014 and/or prior to 2007 (for example, if you borrowed money prior to 2014, the IBR repayment period is 25 years instead of 20). Def take a look at the link I included, although keep in mind it does not capture all the variables (e.g., it does not discuss how marriage would affect monthly payments).

Also keep in mind that there is REPAYE, which, I believe, is worse than IBR and PAYE but easier to qualify for.

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thirdtierlaw (Jan 5, 2017 - 2:27 pm)

REPAYE is only 10% of your income above the poverty line vs. the 15% on IBR. Other than that, the plans are almost identical. Both have the exact same qualifying requirements. The only other BIG difference between the 2 is that REPAYE requires you to use both your wife's and your income, regardless of how you file your taxes. Whereas IBR allows you to be married filing separately and will solely base your monthly payments off your income. I also believe REPAYE affects the amount of interest that is earned each year.

If it wouldn't cause my interest to capitalize plus bring my monthly payments below what is being added by interest, I'd have jumped to REPAYE in a second from IBR. But that is the catch, if you're already on IBR you can't join a new plan without the interest capitalizing. Just don't want to take the hit from the first year I was on IBR and it wasn't even covering the interest. Especially now that my total is slowly going down and who knows what Trump is going to try forcing through. If I'm going to need to change plans anyway, I want my interest to capitalize at the last possible moment.

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mtbislife (Jan 5, 2017 - 10:47 am)

Not married at the moment but would PAYE be better if your spouse is earning little income or would you still say go IBR?

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mtobeinf (Jan 5, 2017 - 11:11 am)

Look at it this way with IBR. PAYE is going to be gutted, in effect, when Trump raises the repayment to 12-12.5% of Income. IBR (for those unfortunate to come of Age during the Bush Administration like myself) is at 15%. By remaining on the Income Based Repayment which will be cut down to 12% and shortened from 25 years to 10-15, you're coming out ahead. Don't like Trump one iota, but I believe he will stick to his word and do the above. He's been rather adamant about that.

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mtbislife (Jan 5, 2017 - 12:24 pm)

Makes sense, thanks.

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thirdtierlaw (Jan 5, 2017 - 3:44 pm)

I believe he was going to gut all the plans and roll them into 1. So I'm not sure it'll matter if you're on PAYE, REPAYE, ICP, IBR, or whatever else they have floating out there now.

I also don't like Trump, but this seems to be one of the only areas where he actually outlined a plan and has been consistent on since the beginning of his campaign. Or the very least that students shouldn't be saddled with debt for the rest of their lives when they are attempting to better themselves and that it is wrong for the government to use student loans to make a profit.

So we'll see, fingers are crossed.

As for mtbislife's question. If your spouse is making little to no money, PAYE or REPAYE can be awesome. IBR will be at 15%, but if your wife submits documentation saying she is making zero your monthly payments will plummet. If you are on PAYE or REPAYE it is even lower. You'll only be paying 10% of your discretionary income, but the poverty line is much higher due to it looking at the total income of 2 people. So it'll be taking 10% of a much smaller amount.

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fettywap (Jan 5, 2017 - 4:02 pm)

You can always switch back and forth between IBR and PAYE or REPAYE. You're not stuck with the same one the whole time.

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zodd (Jan 6, 2017 - 8:27 am)

I have almost a decade into IBR. If I moved to payee to try to pay a little less a month will I reset to the max twenty years?

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thirdtierlaw (Jan 6, 2017 - 9:38 am)

It shouldn't, if you are making payments under any of the plans for 20 or 25 years it counts.

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ilovethelawjk (Jan 6, 2017 - 9:58 am)

It seems that IBR has a cap of the Std. 10 year monthly payment (in the event your income increases). I do not see this cap with REPAYE....

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mtobeinf (Jan 7, 2017 - 7:57 pm)

Precisely. It's not there.

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thirdtierlaw (Jan 7, 2017 - 8:02 pm)

Right, then you just change plans. The biggest advantage I noticed with REPAYE is the break you get on accuring interest on unsubsidized loans. Whereas IBR requires you to pay interest your first 3 years on the plan and doesn't help with the interest after that.

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fettywap (Jan 6, 2017 - 12:54 pm)

No. Changing programs does not restart the clock.

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goorange888 (Jan 6, 2017 - 5:22 pm)

Do you have a source you can provide on this matter? I believe I have heard that any change to your plan will restart the clock...which I hope is not the case.

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thirdtierlaw (Jan 6, 2017 - 6:26 pm)

34 CFR 685.209 & 34 CFR 685.221

Scroll way down to the loan forgiveness section, both say payments under any plan count.

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fettywap (Jan 7, 2017 - 10:39 pm)

There and if you look through the student loan information page where you pay your bill. I just switched to the REPAYE from IBR and it didn't change my time.

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ilovethelawjk (Jan 8, 2017 - 10:44 am)

So, if you marry someone with a high salary, or make more money yourself, you can just change from REPAYE to IBR. Otherwise, REPAYE seems better until one of those two events occurs.

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qdllc (Jan 9, 2017 - 7:47 am)

Possibly. I gave my 2 cents based on what I could recall off the top of my head. Still, be careful about "plan shopping" while in repayment. I don't trust the DoE on this topic, and a lot of times, your best protection IF or WHEN the rules change is that you are in your given plan and don't change plans (subjecting you to new terms).

If you were ICR and they implemented new rules, it may only be applied to new ICR enrollees. So, change to IBR or PAYE then want to go back to ICR and you could lose out on something important as the return to IBR is seen as consenting to the new rules. Unless you're going to save a butt-load of money on one of the other plans, pick what's best for you and stick with it. Don't let DoE or anyone else "sweet talk" you into changing plans.

I remember years ago when so many places wanted me to reconsolidate my loans with them. I asked if they had ICR, and they would say they had "income-sensitive" repayment. It WAS NOT the same thing, and it was giving my loans to a private lender. DoE is the only party doing ICR/IBR/PAYE because they are money-losers for the creditor. Private lenders won't offer those plans (at least not matching the terms as defined by law).

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