My wife has $350K in student loan debt and is on the PAYE plan. Originally she would have had the loan forgiven after 20 years…so in 10 more years…so she's been paying the minimum, letting the interest rise and saving for when the "tax bomb" happens in 2036…
Are there any helpful articles or resources about what is to come for current/existing borrowers?
Does it make sense to leave it alone or move into a different plan?
Are plans not going to be forgiven anymore?
What PAYE Changes Should I Look Into After 10 Years of Paying the Minimum
byu/Jason4prezz inStudentLoans
Posted by Jason4prezz
6 Comments
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The PAYE plan won’t exist in 10 years, so she needs to switch to IBR or RAP. IBR is 25-year forgiveness and RAP is 30-year.
PAYE is getting phased out by 2028. So she’ll need to be on a new plan at that point. Unfortunately she is probably only going to be eligible for Old IBR or RAP.
Old IBR gives forgiveness after 25 years, not 20 and the calculation to figure out your monthly payment is less generous.
RAP gives forgiveness after 30 years
https://www.studentloanplanner.com/income-based-repayment-calculator/
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Like all of us who got utterly screwed by the BS BBB stripping the PAYE plan (I’ve been paying on that plan for 11 years), your wife is going to also get screwed. She’s going to have to switch to IBR, have her payments skyrocket, and have an additional 5 years tacked onto her plan.
Enjoy the suffering. It’s “fun.” It builds character.
*(You can tell I’m still utterly raging over this BS)*
how is this not a class action lawsuit? borrowers are being harmed by the removal of PAYE