Okay there is so much discourse so what are we doing for lowest monthly payments since save is gone? I don’t trust RAP because it’s made under this administration I’m thinking IBR?
What are we switching to?
byu/ExtensionAd4737 inStudentLoans
Posted by ExtensionAd4737
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Let’s make sure not to mislead people here – everyone wait for the letter from your personal servicer! After that you STILL get 90 days to decide which plan to go with. Use this time to do your research and find RAP vs IBR vs PAYE vs Standard Plan calculators.
This administration sucks but strangely I’m currently on unemployment personally and may actually go with RAP. I think it works best for those who are low income. But I’m not making that move until July at the earliest. But only because it looks like if I use my current unemployment “income” my payment is like $46 a month on a total debt of $60k. For me this means the government will subsidize (aka cover) the monthly interest left after my $46 payment. Then I believe they’ll also pay towards my principal up to $50 (my $46 will not cover my principal at all). Not sure if this means they’ll only pay $4 or if it means they’ll pay a whole $50 towards my principal seeing as my $46 went to interest. Someone here lmk if you know!
Also when we switch plans will we be forced to recertify early?
The best plan highly depends on your income, loan amount, and whether you are pursuing forgiveness or pay off. I wouldn’t discount RAP for political reasons, it’s just a repayment plan like all the others and does have some positives (and negatives). Use the loan calculators, or talk to your servicer who should also be able to give you estimates of the monthly payments.
Speaking in general, it seem most people use IBR. I personally am on the standard repayment plan
Just swapped to PAYE. Currently unemployed again so it should place me at $0 for the next year and govn will start covering my interest on all subsidized (I have multi small loans/did not consolidate).
It’ll cap my payments to standard rate too till 2028, which is good because once I’m back to work my income will bury me under RAP guidelines with the AGI calculations. I have a modest amount of legacy loans at a very low interest so standard for me is doable and would be better than RAP with a decent salary.
Im with you too, I don’t trust RAP and I hear once you’re in it all bets are out and you can’t get out. It’s the tiny print to the OBBBA and essentially a punishment for the waived interest and principal match while you’re unemployed. It’s great if you make nothing consistently, but if you do the govn will force you into high payment once you do. I’d rather invest any excess and have money month to month to cover routine expenses and have emergency back up- especially in this economy!
Rap is the lowest payment for some. Not all. The interest subsidies are huge for those with high balances and low incomes..but the longer forgiveness timeline isn’t good