Hello! I just consolidated my Parent Plus loans, and I was told when I applied I was going to be on the standard repayment plan – which seemed ok. My repayment was about $430 a month. Then, I just logged on to Mohela for the first time, and see that I am on the IBR plan, with a payment of a little over $700 a month. Which, is way more than I feel comfortable with. When I do the simulator of the GOV website, other than the ICR plan it seems that I am on the highest repayment plan. Is this right? Should I get off IBR and select the standard plan? I am confused on why I was told standard, and now find out differently. Help with any insight, please! Thank you!
Just consolidated Parent Plus loan — highest possible payment it seems
byu/jenbar inStudentLoans
Posted by jenbar
2 Comments
Balance and AGI?
As someone mentioned, we need the total loan balance and your adjusted gross income (AGI) to really comment on what may be going on here and if it would change significantly with a plan switch.
If you make a high income relative to the loan balance, it makes sense that the income-based payment may be higher than you expected, but since the income-based plans typically “cap” at the standard payment, it’s interesting you are seeing the lower number for standard. Consolidation likely plays into this and one of the experts on this site explains it in a much better way than I could.
Also keep in mind that you want to run all the numbers yourself and make sure you are making payments that actually hit the principal of the loan to avoid negative amoritization.
Edit: Saw the numbers you posted in response to other comment; yes $700 is your accurate standard payment. And you’ll want to aim for that because the payoff (10 years) is much more reasonable than paying $430/mo (which would have you paying on these loans almost 30 years)….unless you have some sort of plan to hand this off to the kiddo or something.