I'll preface this by saying I searched for similar queries and came up empty. I'd call my loan servicer if I trusted the information they'd give me. I also tried the government loan simulator, but it doesn't seem to take into account the starting principal or the year the loan was consolidated.
I consolidated my loans in 2015 right after graduating (from a graduate program, mostly unsubsidized). My principal was roughly $330,000. I was on ICR until the SAVE plan was offered and switched over without interest capitalization, making minimum payments as required. I have been fortunate and managed to pay down my loans to $89,000.
I'm having trouble figuring out a few things around standard repayment vs IBR (and the cap on the monthly payment). I am not going for forgiveness, and I plan to continue to whittle the principal down. Since my job offers monthly loan payments, I'm interested in the lowest monthly payment I can qualify for so my job's monthly loan repayment does the work for me as long as possible, so to speak.
From what I have read, standard repayment cap on IBR applies to the original principal/loan amount when I first entered the IBR program (over $4000 if I remember correctly), not the updated principal at $89k. If I enter standard repayment is that also calculated based on the original principal? Would I qualify for a extended repayment plan despite being 10 years into repayment, and would that extended repayment plan be for 15 years or the full 25?
I also read that if you switch from IBR to Standard repayment, the repayment time would be subtracted from the years you've been on IBR. Does that still apply if I'm past 10 years' repayment?
I appreciate any guidance, and I apologize if this has been answered elsewhere.
Confusion about switching from SAVE/IBR to Standard Repayment Plan
byu/paxbanana00 inStudentLoans
Posted by paxbanana00
1 Comment
Your standard consolidation plan term would be 30 years, starting when you first entered repayment on that loan in 2015. That clock keeps ticking no matter what plan you are on. But the Covid pause and forbearances do pause the clock. So you probably have about 24 years or so left on your standard plan. Your payment would be calculated to reflect that if you switched to that plan. Using a rough estimate, that payment would be around $600.
IDR is an umbrella term for Income Driven Repayment. SAVE, ICR, IBR, and PAYE are all types of IDR plans.
Your IBR payment would depend on your AGI and family size. If your income is high enough to hit the standard cap then it would be a 10 year standard amount based on your total outstanding balance when you first enter IBR. If you apply for IBR now that would be calculated using your $89k balance. That would be about $900 for you. But that can be lower if your AGI allows it on IBR.
Also you currently would need a partial financial hardship to get on IBR but they are working on removing that requirement in the coming months.