So far, all I have read about this “you can’t do it”. So I get that part, but what I’m searching for are the legal terms that lays out why paying off pre-2014 loans DOES NOT qualify you for New IBR. I have tried finding this information, can’t locate it, an even the Mohela and FSA reps have no clue. Asking for a friend.
What’s up with this “LOCKED IN” BS and how does this make any sense or is even justified to continue to charge a person at that rate despite paying off their older loans? How can this old IBR be “locked in”because “***once upon a time, you used to have pre-2014 loans,*** even though they now don’t exist. But they *used to exist”.*
* *Please make it make sense or at least help point me to the direction of the legal terms that explains this. More importantly, how the heck can this be fought?
I have 7K of older loans from undergrad compared to the remaining 229,000K from grad school that is keeping me in Old IBR. I do not understand why or how I cannot be a good little slave, pay that portion off, and still not qualify for new IBR.
For the record, I’ve asked Mohela reps and they could not provide me this information (legal written reference to these terms).
On the other hand, I spoke with 2 FSA reps who said I CAN indeed pay off old loans to then qualify for new IBR. I’m going crazy with all this time spend (hours) waiting on hold just to get incompetence or conflicting information!
Thanks. And apologies if my post is scattered; this whole ordeal is a nightmare as we know.
Make the old IBR “Locked In” make sense; why can’t I pay off the older loans to qualify for New IBR?
byu/jersi13 inStudentLoans
Posted by jersi13
3 Comments
Because of the way Congress wrote the law. And they do it that way for long term budgeting purposes.
> What’s up with this “LOCKED IN” BS and how does this make any sense or is even justified to continue to charge a person at that rate despite paying off their older loans?
You had to be a ‘new borrower’ as of x date in the past, if you did not meet that criteria at that exact moment in time you will always be an ‘old borrower’ for these purposes (unless they change the law)
I feel for you, my friend. Im also one of those borrowers who qualify for PAYE, but not new IBR. I assume you wouldnt care about being an “old borrower” if they weren’t sunsetting PAYE since those terms are functionally equivalent to new IBR. That Congress didnt grandfather old borrowers into PAYE or allow us a one time opportunity to transfer into new IBR is a gross injustice. The idea that they can retroactively change payment terms is bogus. Imagine paying a mortgage for over 10 years (in my case 13 years) and after all that time of continued repayment and annual recertifications the bank manager says, “Oops. Carl the loan officer made a mistake. I never gave him authority to offer the loan terms he gave you. We’re unilaterally changing your loan terms so you pay more than you bargained for, and for a longer period of time. Oh, but Frank who randomly applied for a mortgage a few years after you- he can have your old loan terms.” It’s bullshit and in any other legal setting that would never hold up. If the fed gov made a mistake and let that mistake ride for over a decade, then the consequences should lie with them.