Servicer: EdFinancial
I have been in PAYE since finishing school in 2021 and was due for my first income recertification since that time this coming month. I submitted my income recertification last week to stay in the PAYE plan and received the following communications (multiple separate messages) from my servicer in the following order:
1) "We have received your request for PAYE. After reviewing your request, we have determined that the monthly student loan payment under your current repayment plan is lower than the calculated payment under PAYE ; therefore, we have not changed the repayment plan on your account. If you are unable to afford your current monthly payment, or if you still wish to change your repayment plan to PAYE , please contact us at the web address or phone number listed below."
2) "You recently applied for the Pay As You Earn Repayment Plan to lower your monthly student loan payments. We are unable to approve your request because you do not meet the Partial Financial Hardship (PFH) criteria for this repayment plan as required by federal regulations. PFH is defined by the Department of Education as a situation in which your student loan payments on all eligible Direct student loans (excluding Direct Parent PLUS, and Direct Consolidation Loans containing any Direct Parent PLUS loans) and 150% of the poverty line based on your state of residence and family size."
3) "In response to your inquiry about your account; We are unable to process the Income-Driven Repayment Plan as your loans do not qualify for any IDR plan since your Income is too high."
4) "We recently received your income-driven repayment (IDR) application, but since a federal court issued an injunction preventing the Department of Education (ED) from operating the Saving on a Valuable Education (SAVE) Plan and other IDR plans, IDR application processing is taking longer than normal. Due to these delays your IDR application is in a pending status and Edfinancial Services is putting your account into a forbearance for up to 60 days."
My family's income did increase, and my new calculated student loan payment was going to be the same amount as the 10-year Standard Repayment Plan. I have read many posts on this subreddit and others from the recent months from posters that have run into similar issues without clear resolution noted in most cases and wanted to see if there was any updated guidance.
The consensus I received from these posts is that your servicer should NOT be allowed to kick you out of PAYE if you were already in it (though I don't see this wording in an official studentaid.gov article) and to reference 34 CFR 685.209 which states that to enter PAYE the borrower must "(iii) Has a partial financial hardship when the borrower initially enters the plan;" but there is no requirement to continue to have this partial financial hardship.
I am fine paying the 10-year Standard Repayment Plan monthly payment, but I would like to stay in the PAYE plan. It's interesting that the above messages from my servicer are a bit contradictory – #1 seems to leave the possibility of entering PAYE as an option but #2 and #3 seem to close the book on it.
Appreciate everyone's input as we navigate this collective quagmire.
EDIT: I spoke to EdFinancial and despite my numerous attempts to explain that there is no written guidance that suggests that I should be kicked off PAYE, they continue to parrot the line that "you no longer demonstrate a partial financial hardship" and they were trying to get me to apply to a different plan.
Servicer rejected request to stay in PAYE after income recertification
byu/sketchydaddy inStudentLoans
Posted by sketchydaddy