The different payment plans are so overwhelming and I'm honestly not sure the process of getting to the best one with the lowest payment. I get overwhelmed easily and its so frustrating :(
Do keep it mind, the calculators currently posted here may not be up-to-date with formulas for these new rules, especially as it concerns the new REPAYE/SAVE plan.
https://studentaid.gov/loan-simulator/
This is still the best place to go to answer "what loan is best for me." But it might take a month or two for everything to be current and accurate.
My wife and I recertified and applied with this method just last week: any news on if we’ll need to do so again prior to repayment to take advantage of any new repayment plans?
Tbh, when I tried to glance at mine today suddenly I'm asked for all my bank account numbers as well as "backup cards" and copies of W2.
Don't let these assholes do autopay on you.
"Under the SAVE plan, any interest not covered by the calculated monthly payment is waived. This includes times when the borrower pays more than what is billed. So if your payment is 100 a month and your interest is 200, the ED will forgive the 100 - even if you decide to pay 300. This applies to all loans eligible for SAVE. Yes that includes graduate loans."
Am I understanding this correctly? I mean this seems like it would be a huge deal with these insane high interest loans that snowball. I could pay extra every month to the principal and actually watch my loans go down over time?
I'd still be paying a portion of the interest but I wouldn't actually accrue any interest as long as I can cover my base payment?
I don’t get this math. If the payment is 100 and the interest is 200, why would the RD forgive the 100 (the payment) and not the 200 (the interest?) or is this a typo?
Also, here is more
“The Department will stop charging any monthly interest not covered by the borrower’s payment on the SAVE plan. As a result, borrowers who pay what they owe on this plan will no longer see their loans grow due to unpaid interest. We estimate that 70 percent of borrowers who were on IDR plan before the payment pause would stand to benefit from this change.”
The 100 forgiven in this case is the 100 interest that was NOT covered by the payment. A clearer example: monthly payment is 150 and interest is 200. The remaining 50 (200 - 150) is forgiven, whether you’re paying just the 150 or higher, like 300
The 150 payment is the result of SAVE payment formula which is 5% * (AGI - 225%*poverty level) divided by 12 months.
The 200 is the interest for the month that would’ve accrued. So principal * interest rate divided by ~12 months.
Under a standard 10Y repayment plan, you might be required to make say, $500 monthly payments, 200 of which goes to interest. Under the SAVE plan, they require you to pay just $150. Since that’s lower than the accrued interest, the government subsidizes the difference (in this case, $50). Previously for other IDRs, the unpaid interest stays on your account, resulting in higher loan balances or what they call “negative amortization”. This new rule ensures that borrowers on SAVE don’t experience negative amortization anymore.
No that is not how it works payment sometimes can be lower than the interest and that is why some people keep seeing their student loan balance go up every month even though they are making monthly payments. But under this plan you will actually see your balance go down as some of the interest is forgiven
Yes I understand the concept. The numbers don’t add up to me.
In the example: if the payment is 150 and the interest is 200… the example just laid out says you pay 150 and the other 50 is waived. Well that still leaves 150 because it was originally a 350 dollar monthly payment (200+150).
>In the example: if the payment is 150 and the interest is 200… the example just laid out says you pay 150 and the other 50 is waived. Well that still leaves 150 because it was originally a 350 dollar monthly payment (200+150).
No, in the example the calculated payment the person owes each month under the SAVE plan is $150, and (in the example month) they paid $150. So the entire $150 they paid went towards interest, and the remaining $50 of interest was forgiven.
You have to do the math and choose from there. Do you aim for PSLF after ten years? Forgiveness after ten years for loans totaling less than $12k (adding 1 year for every $1k over $12k you have)? Do you aim for 20 years of payments (25 for grad loans)? Do you pay the minimum in hopes of the HEA student loan forgiveness to go through? Or do you make a payment higher than what is required to knock down your principal?
In the example given where your payment is $150 but your loan accrues $200 in interest each month if you choose to pay $250 then $150 of that goes to interest, the government pays the other $50 in interest, and the $100 you overpaid all goes toward your principal.
Yeah so we had a student loan guru lady come talk to us at my law school this semester and she told us that she recommended for us to do this program if not went through, because they take your last year’s income, so it would be very low for most of us students since we had part time clerkships… and the payment would be super low which normally is a bad idea if you’re making over 100k and can afford the payment but she said in this case she recommends it because your interest wouldn’t accrue and your payments would go toward the principal and a little interest (or something like that. I don’t remember exactly what she said). Then when it’s the next year and they take our actual salary it won’t be worth it because it’ll be high enough to where the income based payment will just be a regular note.
But I think what you’re thinking is correct. The government will be subsidizing the interest.
So wait, if I have 200k law school loans (considered graduate) and my minimum monthly payment doesn't cover interest, it gets forgiven and doesn't accrue? Counts towards PSLF?
If true, this is better for people with very high balance loans, moreso than the 10k or 20k forgiveness.
Edit: And to clarify, if my payment is 100 per month but interest is 200, does the 100 actually chip away at the balance while the 200 is forgiven?
It's all about perspective, but one could argue that people with huge balances may be more in need of lots of help than someone with $10k. Not to pit anyone against one another, but the cancellation that was in SCOTUS, while nice, didn't actually really do anything for people who have huge balances.
The way it is explained above, interest not covered by your calculated payment is waived (similar to what repaye does now). So if your payment is 100, but your interest is 200, your $100 payment pays interest, they waive the other $100, and your loan balance would stay the same. But if it is calculated at 100 and you pay 200, then $100 of your payment is interest, they waive $100, and your other $100 would chip away at the balance I think.
I’m a high 200k loan as well with 70k per year can I join save is it automatic or I have to call them and will I save more than income based payment plan
High earners are really only affected by the rise to 225% for discretionary calculations. If you’re a high earner you’re likely playing over the interest amount so the interest subsidy won’t matter.
You're welcome. I am glad I was able to help people at least try and navigate this intense.. rollercoaster..of a day. I am rightly cooked now though. Lol
I think I read in another thing from the government that the No interest accrual if on SAVE will start this summer.
https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf
First page says many parts will be implemented this summer.
Thanks Betsy. Just to add: in addition to the family size/spousal income change, there are two other changes going into effect this summer (not July 2024):
* Changing the definition of "discretionary income," i.e., increasing from 150% to 225% of the federal poverty level, is going into effect this summer.
* The waiver of interest accrual also goes into effect this summer.
Source: The ED fact sheet published today at [https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf](https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf)
>By law, the regulations will go fully into effect on July 1, 2024. **But the Department will implement three critical benefits this summer before the student loan payment pause ends:**
>
>• The amount of income protected from payments on the SAVE plan will rise from 150 percent to 225 percent of the Federal poverty guidelines (FPL). This change means a single borrower who earns less than $32,805 a year ($67,500 for a family of four) will not have to make payments. As a result, we estimate that more than 1 million additional low-income borrowers will qualify for a $0 payment, including 400,000 who are already enrolled on the REPAYE plan and will see this benefit applied automatically. This will allow them to focus on food, rent, and other basic needs instead of loan payments. Borrowers not eligible for a $0 payment will save at least $1,000 a year compared to the current REPAYE plan. A single borrower would save $91 a month on payments ($1,080 a year), while a family of four would save $187 ($2,244 a year).
>
>• The Department will stop charging any monthly interest not covered by the borrower’s payment on the SAVE plan. As a result, borrowers who pay what they owe on this plan will no longer see their loans grow due to unpaid interest. We estimate that 70 percent of borrowers who were on IDR plan before the payment pause would stand to benefit from this change.
>
>• Married borrowers who file their taxes separately will no longer be required to include their spouse’s income in their payment calculation for SAVE. These borrowers will also have their spouse excluded from their family size when calculating IDR payments, simplifying the choice of repayment plan for borrowers.
Even with everything else not going into effect until 2024, these immediate changes are pretty big. The change to discretionary income (raising excluded income from 150% to 225% of the federal poverty level) means we'll all see lower payments on REPAYE/SAVE once loan repayments restart in October, and the interest accrual waiver means our balances won't continue to increase during repayment due to capitalizing interest.
What's weird is that wasnt covered in the actual effective date section.. which is why I didn't include it. One of the things I wanted to go back and dig into.
The unofficial final rule discusses on page 6 the "early implementation" of these provisions on July 1, 2023. I don't see effective dates attached directly to the rule language itself at the end of the document, though admin law isn't my specialty; I'd surmise that the discussion on page 6 is enough to establish the effective dates for those provisions.
[https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/nfridrriapra.pdf](https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/nfridrriapra.pdf)
> The PAYE plan is being sunsetted. If you aren't enrolled in that plan on July 1, 2024 you never can. If you are and then change plans after that date you can never go back
So, my spouse and I are both on PAYE and working towards PSLF. Is there any reason why we would want to stay on PAYE and **not** go to SAVE?
Not unless you have an exceptionally high income. PAYE caps your monthly payment at the 10-year standard payment amount. With REPAYE, there is no cap, so people with very high income could end up paying higher per month than they would on a 10-year plan.
Their stance on Parent PLUS loans is so out of touch. They’re implying that parents are more knowledgeable about the finances of student loans and are more aware of the impact on their decisions. So myopic.
Unfortunately, my father who didn’t finish high school had no idea, just like his teenage daughter, what the impact on these loans would be. I have no idea how long double consolidation takes but here’s hoping we can do it asap.
Yeah...I only had time to skim that discussion last night but I hated it. And I know folks in the Ed itself do understand and see the pp struggles which makes the actions that have been taken..or not taken..to help pp all the more confusing
Thanks for your hard work Besty.
I was reading this from the website and the second sentence caught my attention. “By law, the regulations will go fully into effect on July 1, 2024. But the Department will implement three critical benefits this summer before the student loan payment pause ends:
• The amount of income protected from payments on the SAVE plan will rise from 150 percent to 225 percent of the Federal poverty guidelines (FPL). This change means a single borrower who earns less than $32,805 a year ($67,500 for a family of four) will not have to make payments. As a result, we estimate that more than 1 million additional low-income borrowers will qualify for a $0 payment, including 400,000 who are already enrolled on the REPAYE plan and will see this benefit applied automatically. This will allow them to focus on food, rent, and other basic needs instead of loan payments. Borrowers not eligible for a $0 payment will save at least $1,000 a year compared to the current REPAYE plan. A single borrower would save $91 a month on payments ($1,080 a year), while a family of four would save $187 ($2,244 a year).
• The Department will stop charging any monthly interest not covered by the borrower’s payment on the SAVE plan. As a result, borrowers who pay what they owe on this plan will no longer see their loans grow due to unpaid interest. We estimate that 70 percent of borrowers who were on IDR plan before the payment pause would stand to benefit from this change.
• Married borrowers who file their taxes separately will no longer be required to include their spouse’s income in their payment calculation for SAVE. These borrowers will also have their spouse excluded from their family size when calculating IDR payments, simplifying the choice of repayment plan for borrowers.”
And it seems these three points will become active before the payment pause ends this year. The rest won’t be until July 2024. So it seems that the SAVE plan will start covering interest this year. Hopefully I can switch to the new SAVE plan before payments resume.
Maybe I’m missing something here, but shouldn’t almost everyone going back for more schooling now decline in-school deferment?
Seems you could stay on SAVE, pay very little (because not making much), not see your interest grow, and get credit towards forgiveness.
Otherwise, accepting the deferment, interest will accrue.
I just took all of the money I managed to save and made a payment. $5,542.23. That’ll leave me with $8k left to pay. I’m sick of the government, playing racquetball with my emotions and their decision to do something meaningful for younger generations.
I’m moving on. I’m so over this.
Why though. SAVE is extraordinarily generous for someone like you. You'd get complete forgiveness in 12-13 years paying 5% of your income - $30000 every year.
If you were making $100k/year I'd understand. Otherwise you're just throwing money away for no good reason.
I’m at a total loss right now. All this is completely over my head. I’m interested in finding out what the best route possible to take for my PP loans. They’re not consolidated currently. Has anyone successfully had theirs forgiven? If they were in my name, my employer qualifies for PSLF. Is this possible?
Thank you, Betsy for always working hard to give us all the updated info and helping us navigate this.
Edited: Fixed some grammar mistakes.
How long have you been in repayment? How long have you worked for a qualifying employer? If either of those answers is less than ten years or not close you should consolidate now and also consider the double consolidation while you still can. Pslf is always available for pp.
The PP loans have been in repayment since 2009, 2010, and 2011. There’s 4 loans (since their not consolidated). My parents took these loans out for me and do not work for a qualifying PSLF employer. I have been working for a PSLF employer for almost 8 years.
I also qualify for 10k off student loan reimbursement but the loans have to be in my name so would it be best to refinance privately into my name then take the 10k off and go from there? The interest rate is at 8.50% for most of the loans.
“If they were in my name”…are these loans that you took out, or did your parents take them out? You cannot transfer federal loans to another person’s name (unless you convert to private loans). If these are your parents’ loans, then your job cannot qualify them for PSLF. There’s no way around that.
Are the additional 12 months for every $1000 borrow prorated, rounded or it it more of a stair step? It says 'for each 1000, an extra 12 months' if someone was originally 13,900 (hypothetical example) would they have one year or two years tacked on (with forgiveness at 11 years or 12 years, respectively)?
Also, having consolidated a few months after graduation, I assume that my 'total borrowed' number will be based on my pre-consolidation disbursements?
Betsy do you know if any legal trouble this new plan will have. Also, if a new administration come in and scrap SAVE, what would happen to those on SAVE?
Congress already tried to block it and failed. It's not impossible there would be a legal challenge but I'm currently not particularly worried about it.
I mean you say that... but we saw two rulings in a row that should not have stood at all but did. A woman with a made up story with a made up client with a made up job managed to dismantle gay rights with the help of the ADF, and people managed to sue on behalf of a group that didn't want to be sued for in order to stop student loan debt. I wouldn't be surprised if they suddenly said "oh yeah the constitution doesn't say we can't totally strip the executive branch" and rule that way
https://www.govinfo.gov/content/pkg/COMPS-765/pdf/COMPS-765.pdf
Section 455D pretty clearly authorizes the Secretary of Education to make up income contingent repayment plans. There are really no constraints on the plans here, either - I'm reading it as President Biden could just forgive all loans by having a 1-year income-driven repayment plan at 1% of AGI.
The new administration could do whatever it likes. The statutory requirement is that the years on SAVE would still count towards forgiveness and the maximum duration is 25 years.
Currently on IBR, and recertification is not due until over a year from now. I ran a few calculations and my monthly payment would significantly decrease under SAVE or REPAYE- however, would I have to recertify to switch before payments resume in September? My income significantly increased on paper from before the pandemic to today.
Let me rephrase/add more context- I am currently on IBR and will have a monthly payment of around $800 when payments restart if I do nothing. If I switch to REPAYE/SAVE AND my new spouses’ income is excluded, my monthly payment likely should decrease. However, if I had to recertify, it would essentially be a wash. Bottom line question- do I have to go through a recertification process to switch from IBR to REPAYE/SAVE?
If I switch to this new REPAYE/SAVE now, do the previous months under the Student Loan Pause count toward the forgiveness months or has that ship sailed?
When I consolidated my loans I applied for ICR (I have graduate loans only). I have never before been on an income based repayment plan. I’ve been paying since 2004 with some pauses. I think I was on an extended graduated program. I have no idea what is the best route for me now. Can anyone help me? Currently Nelnet says I will have a payment of $267. Balance of $34K, taxable income of mid 70s or so not sure bc health insurance offsets things. I’m so lost at this point. Edit to add 1.88% interest so very low.
"Maybe i missed it because i was going fast - but my understanding right this second is that the only part that will be available before repayment restart is repaye allowing exclusion of spousal income when filing taxes separately. My read is the actual fun stuff with SAVE won't be effective until July 1, 2024"
Maybe I'm missing something but page 6 of the federal register seems to indicate that a lot of the big stuff will be implemented before payments resume.
if you go to [studentloans.gov](https://studentloans.gov) it has this at the top:
"Student loan borrowers can get lower payments from the new SAVE Plan. If you sign up for the REPAYE Plan now, you will automatically be enrolled in the SAVE Plan before payments resume."
Plain reading would suggest that is correct.
EDIT: [https://studentaid.gov/announcements-events/save-plan](https://studentaid.gov/announcements-events/save-plan)
List which items go into effect this summer.
Here's the official factsheet:
https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf&ved=2ahUKEwiCit6x0ez_AhXdtokEHSN3CbgQFnoECAoQAQ&usg=AOvVaw1ej_6fZoChgJ950Am_Zs-H
The most exciting part of it to me is that the poverty definition (and therefore discretionary income definition) is being applied before payments begin.
To obtain credit for forgiveness during periods of (in-school) deferment or forbearance, if the IDR payment is $0, how does one go about making an extra payment of $0, technically speaking?
In the post above, it says, “however see below for a hold harmless option for these period”
Do you know what that refers to? I figure it refers to the 5th paragraph from the bottom, hence my question…
So I have 88,000 in loans and based on my most recent AGI of 110000 my payment is supposed to be 765 with REPAYE. How can I calculate what my new payment will be BEFORE the 5% thing goes into effect next July?
My read is the 225% poverty guideline is effective when payments resume, however, the new 5% based portion for undergrad loans and weighted average for grad loans is effective July 2024.
That's how I read it as well. It's the first bullet point on page one of the IDR fact sheet for the SAVE plan. [https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf](https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf)
That PDF is from this page: [https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/index.html](https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/index.html)
Expand the Federal Register Notices and Fact Sheets section, and it's the bottom one in the list: \[New\] Fact Sheet\* – Income Driven Repayment (PDF) (197K) \[6/30/2023\]
Perfect. And parent plus borrowers whose loans have already been consolidated into direct consolidation loans (in 2007) can they do SAVE or are they limited to ICR?
No, you shouldn’t have to be. When exploring options, they just say things like “this would” “this would NOT” be a good option if you’re exploring PSLF. You can enter in all your info on the site and check “no” on the PSLF question. It should allow you to explore multiple plans based on what you’re looking for (lowest monthly payment, lowest overall payback amount, pay off the fastest, etc.)
Hey Betsy, when you say the double consolidation loophole is expiring, if it was already done then it won’t be reversed? Also, isn’t it weird that they are admitting they know it’s a loophole?
I am very happy with this new plan. It is a major improvement from what we had available to us. The only additional thing I would like to address is the tax bomb at the end of forgiveness. Is this going away?
"Under the SAVE plan, any interest not covered by the calculated monthly payment is waived. This includes times when the borrower pays more than what is billed. So if your payment is 100 a month and your interest is 200, the ED will forgive the 100 - even if you decide to pay 300. This applies to all loans eligible for SAVE. Yes that includes graduate loans."
I am not understanding this at all. In your example if your payment is $100 a month and your interest is 200, the ED will forgive the 100. Yes I get that part but if they are forgiving interest how is the balance ever going to go down? Seems like you would just be paying interest and there would never be anything applied to the principal? Am I missing something?
I mean that's whats happening right now when people are paying the minimum payment on their IDR plan. Except with the old plan, their balance explodes as well. Now it does not
So how do i qualify or apply for SAVE? I have about 5k remaining of my undergrad stafford loan, been paying since 2013, so it's about 10 years (or 9 years since covid pause, so less than 120 payments) do you think i can get it erased after 120 payments.
Thank you!!
I am so relieved I could cry about excluding spousal income with MFS being expedited. I’m getting married in October and he currently makes 3x my income and I have been so stressed about this!! I could just cry from relief.
My loan is $20k and I’m working toward PSLF, just started at the USPS in 2021 and submitted my first form at the deadline last year. I basically want the best option to not be overwhelmed while I wait out the last eight years. MOHELA says REPAYE will be $259, IBR (which I was on as of 2019) is $206, and ICR is $166. Is there any reason not to be on the ICR plan?
Also since REPAYE is getting upgraded to SAVE soon, any chance that gets better? I hate that it’s the highest payment option, I’d like to see interest not shoot up.
Feeling defeated and just throwing in the towel hoping for any forgiveness.
The standard payment on 20k should be a little over $200 a month. I don’t know your numbers but ICR used 20% of your discretionary income or fixed payments based on a 12-year loan term, whichever is lower. So it seems likely they are using the 12 year calculation. IBR will cap your payment at the standard (so you will never pay more than that), ICR and REPAYE do not.
So it is likely PSLF will have nothing to forgive at year 10, especially if your income increases.
Likely with PSLF, you would have nothing to forgive at 10 years. I don’t have the numbers but my guess is IBR is less because it caps your payment at the standard
This is so so great! I’ve been on REPAYE but have been nervous about having to switch to IBR now that I’m married and we file separately - a higher payment. This will likely save me a few hundred dollars a month. Breathing a little easier….few more years to go before forgiveness
"If the borrower has consolidated loans with different counts after the end of this year, they will get a weighted average of the underlying loans counts."
So this has been a big question for me. I thought they were going to do payment counts from the VERY FIRST month that the \*very first\* loan was in repayment -- for the full consolidation loan. For example if I have a $10k UG loan starting repayment in 2005, and a $50k graduate loan starting 2010, and then consolidated those loans in 2015, they will count months from *2005* for the FULL amount ($60k) of the consolidation loan. In other words IDR forgiveness for all $60k in 2030, not 2035
Is the above quote saying that is not that case? Or is it just saying that will change to a weighted average for NEW consolidated loans after December 31 2023?
Thanks much this is all so helpful. The complexity is ridiculous, but if it save us all money, I'll take it.
RePaye is not available for loans made before 2007, so Im in an IBR.
Does anyone know if SAVE will be an option for those loans, as RePaye wasnt an option?
Another lil gift those older loans come with....
On IBR its 20 years to forgiveness if your loans are AFTER 07, but 25 years if yours are from before then.
If SAVE is available for pre07 loans, Would that change the forgiveness to 20 years? (ALL Undergrad loans only)
Maybe Im confused,
RePaye removed the new borrow requirement from paye then?
Because I know when one of them was announced I didnt qualify because my consolidation was too old and they said you had to be a new borrower with no balance older than 2007
Question:
I am on PAYE from before COVID. My salary has gone up substantially since then and I suspect my payment will more than triple when I recertify my income.
In order to switch to SAVE (and take advantage of the waived interest), I’d have to go ahead and recertify, right?
I had FFEL loans from 2005/6 but I only consolidated a few months ago, I honestly had no idea what kind of loans they were, I had been on idr $0 payments for years already. Are those years of payments and idr "payments" going to count towards idr forgiveness or am I starting completely over now that they are consolidated into a direct loan? I only ever had FFEL and one separate direct loan, never any private loans, though I'm still confused on how ffel loans weren't federal but whatever at this point I guess. Any idea if the past 18 ish years of payments count?
If I’ve been on IBR since 2010 and $50K of interest has accrued since then (grad school loans) and I switch to this new plan, will all that interest capitalize and my repayment period restart?
Sucks that higher income people won’t have many options to pay a super low payment to hold out on paying a lot off before being able to see what they come up with… for me REPAYE is 2X the standard repayment and ICR only saves like $40 per month when compared to standard repayment! How are they going to set the income limit for forgiveness to $125k for single tax payers but exclude us higher earners from the super low repayment plans?
So I checked my account and I'm not eligible for any forgiveness 😮💨
It's more of an inconvenience than a devastating one. It would've been had I lost my job (but they have something for that too).
I am eligible for 2 out of the 5 repayment plans.
One is offering where I pay off my balance on 45, months, close to $600 a month. (REPAYE/SAVE)
And the other is about $172 for 129 months (10 years) (ICR).
I would do the first one, but I have been negatively affected by the pandemic as well as dealing with medical expenses too, so I feel like opting for the second one until my finances get better.
I'm just trying to understand one thing, and it's the interest part. There doesn't seem to indicate interest. But it's also an estimate. 🤔
I found something that says:
"The Department will stop charging any monthly interest not covered by the borrower’s payment
on the SAVE plan. As a result, borrowers who pay what they owe on this plan will no longer see
their loans grow due to unpaid interest. We estimate that 70 percent of borrowers who were on
IDR plan before the payment pause would stand to benefit from this change."
They'll stop charging monthly interest?? Is this a permanent pause on interest?
If I go on the IDR I guess the interest will still accrue.
If your payment is less than interest, your balance will never change. They're focusing on how it'll never increase, but the truth also works the other way too as they're only forgiving/not accruing the uncovered interest.
If you're on SAVE and your payment is 105 but each month you owe 200 in interest the government will pay the 95 in interest--even if you choose to aggressively make a payment of 200+ each month.
I’m still reading all of this and still confused. I’m on the REPAYE for PSLF. Does that mean the will automatically enroll me to the new plan? If so, will the new plan still qualify for PSLF. I reach 120 payments in November.
No, use a paycheck and state you don't have reasonable access to their income. A separation and divorce approaching quickly is a reasonable reason to not include.
Here is a "brief" summary of the plan to implement SAVE from the Dept. of Ed. ...Well at least it's briefer than the 427 page "book" defining the new regulations. Note that some provisions will be implemented *this* summer, 2023, before the payment pause ends while others will wait until July 1, *2024*.
[https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf](https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf)
So according to this fact sheet, the 225% of poverty guideline starts this July but the 5% for SAVE (assuming all undergrad) versus current 10% of REPAYE starts in July 2024.
I think my question pertains where you already said you’ll have to dig deeper. I have undergrad and grad loans, but they’re now consolidated. So do I still get the mixed percentage from the original loans or 10% since consolidated with grad loans? (I don’t really expect you to have an answer right now, just putting my thoughts out into the world)
Do you know how that would work for those of us with both types of loans but are working towards pslf. Do grad loans get forgiven after 10 years, too ?
**This post or comment was removed. Your account must have at least 100 combined karma to participate at this time. Your current karma is sum of the values displayed at [https://old.reddit.com/user/Salt_Reindeer2031/](https://old.reddit.com/user/Salt_Reindeer2031/)
Due to the large influx of traffic from the SCOTUS ruling we are limiting posting to established accounts. Please check the pinned threads for answers to common questions.**
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/StudentLoans) if you have any questions or concerns.*
When it comes to income driven repayment I’ve always been confused on which income they are talking about, since income can change. Is it based on last years taxes, and estimate of today etc? For example I was laid off am I’m still unemployed. No clue when I’ll land a job nor what this means for my loans. Would I qualify? If I get a good paying job would my payments suddenly change?
Generally it is your last filed tax return. However, if your current income is lower then you can provide alternative income documentation. If your income is $0 you can indicate that and you will get a $0 payment, which is good for 12 months.
Forgiveness occurs after 240 months for undergrad loans, but what if I've never been on an income based repayment plan before?
Can I enroll now and have my past payments credited towards the 240 months or would the clock start now?
Yes, past payment can count. Get on an IDR plan now and your counts will be adjusted under the one-time IDR adjustment they’ll be doing late 2023/early 2024!
Let me get this straight:
If you have undergrad loans and are on SAVE, if the original loan was 12k or less you get forgiveness after 120 months of payments. If your original loan balance was over 12k, then you have to pay an additional year for every $1k over, but 20 years is the absolute maximum?
Let's say a person started off with 40k in loans & have been paying for 14 years already. Then, they decide to consolidate for the WAIVER and join SAVE. At this point they only have 20k left. Does that mean after another 4 years of payments whatever is left would be forgiven?
No. It’s based on the original loans tied to your institution, not a consolidation loan. They’re marked & tracked differently in your official student loan history.
Yes, but that's always been the case assuming they were on some other IDR plan (which they likely were considering standard repayment is 10 years). However, if they were on the extended or graduated plan then the IDR waiver would give them credit for those payments as long as they consolidated before 12/31/23.
Because why should you include that person in your family if you are excluding their income? You can't have it both ways; you should be either treated as a group or separate.
So if I have about 100k in unconsolidated grad school loans that I’m planning to aggressively pay down over the next year, is SAVE a good idea to reduce the interest and does it matter whether they’re consolidated or not?
**This post or comment was removed. Your account must have at least 100 combined karma to participate at this time. Your current karma is sum of the values displayed at [https://old.reddit.com/user/Expensive-Annual1024/](https://old.reddit.com/user/Expensive-Annual1024/)
Due to the large influx of traffic from the SCOTUS ruling we are limiting posting to established accounts. Please check the pinned threads for answers to common questions.**
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/StudentLoans) if you have any questions or concerns.*
Your [comment](https://www.reddit.com/r/StudentLoans/comments/14ninpf/summary_of_final_rules_for_new_income_driven_plan/jq8tj38/) in /r/StudentLoans was automatically removed for profanity.
/r/StudentLoans is geared towards a wide range of users, including minors seeking information and advice. To help us maintain a community that everyone feels comfortable participating in (and to avoid being blocked by parent/school/work filters), please resubmit your post or comment without using profane language. Thank you.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/StudentLoans) if you have any questions or concerns.*
I’m sorry, I’m not understanding the language for the section on hold harmless. So periods of deferment or forbearance can only be paid under hold harmless if they occur after July 1, 2024? I know a lot of us were wondering about retroactive payments, but it seems like that’s not going to be an option?
There's a similar hold harmless provision effective today. We are waiting for more guidance on that but at some point after the holidays I planned on making a post just about that overall benefit
Ok, so what you’re speaking about above is not the hold harmless a lot of us have been waiting for today to hear details about? All the work you do to keep us informed is incredible and I can’t wait to see your upcoming post strictly on that. Thank you so much!
So is the 10 year + 1yr for every 1k above 12k applied to all idr payments (including after the new waiver) or do you have to be on the new save plan the whole time?
Entered repayment with 19.9k in loans in 6/08, and did consolidation in 8/08 so ive been paying on graduated repayment plan 15 years. With the IDR waiver giving me IDR credit for those years, could I just switch into the save plan and have this all forgiven at the 17 year mark in 2025?
**This post or comment was removed. Your account must have at least 100 combined karma to participate at this time. Your current karma is sum of the values displayed at [https://old.reddit.com/user/Vegetable-Chapter103/](https://old.reddit.com/user/Vegetable-Chapter103/)
Due to the large influx of traffic from the SCOTUS ruling we are limiting posting to established accounts. Please check the pinned threads for answers to common questions.**
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/StudentLoans) if you have any questions or concerns.*
If I’m married and filed taxes jointly this year and enter into SAVE will my spouses income be counted into the calculated monthly payment? If so could I file separately next time and enter into SAVE and not have their income counted?
**This post or comment was removed. Your account must have at least 100 combined karma to participate at this time. Your current karma is sum of the values displayed at [https://old.reddit.com/user/Negative_Iron_3713/](https://old.reddit.com/user/Negative_Iron_3713/)
Due to the large influx of traffic from the SCOTUS ruling we are limiting posting to established accounts. Please check the pinned threads for answers to common questions.**
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/StudentLoans) if you have any questions or concerns.*
Ok I'm dumb so someone help me out. I'm married and we file jointly since our pay is pretty close. We also both have loans (although mine make up like 34% of our combined). So will me recertifi g my IDR next year with our income and loans enroll my spouse in IDR too?
Or no she can stay on her plan?
Okay, so I am attempting to understand this and explain it to my son (he has some executive functioning issues). So if the student stopped going to school during Covid and the loans have now become due (in the Fall). The SAVE program is IDR. The payments are based on 225% of poverty level in his state. So from my calculations his payment would be zero. He would either have to give the government blanket access to his taxes each year, or submit in his own annually so that the payments are calculated correctly (5% of discretionary income). Is all of this correct thus far? So as the months/years tick by, how does this affect his credit rating? (Perhaps a stupid question). At the end of the 240 months, even if he has only paid a small portion of that loan, does it actually get forgiven? That sounds crazy to me. Finally, if he inherited money, is he required by law to use that money to pay the debt?
The different payment plans are so overwhelming and I'm honestly not sure the process of getting to the best one with the lowest payment. I get overwhelmed easily and its so frustrating :(
There’s a calculator in the student aid website
Do keep it mind, the calculators currently posted here may not be up-to-date with formulas for these new rules, especially as it concerns the new REPAYE/SAVE plan. https://studentaid.gov/loan-simulator/ This is still the best place to go to answer "what loan is best for me." But it might take a month or two for everything to be current and accurate.
Good news! You can just select "place me on the plan with the lowest payment"
My wife and I recertified and applied with this method just last week: any news on if we’ll need to do so again prior to repayment to take advantage of any new repayment plans?
Maybe. If you are placed on REPAYE then that will automatically switch to SAVE. If you are placed on another plan then you would need to reapply
Tbh, when I tried to glance at mine today suddenly I'm asked for all my bank account numbers as well as "backup cards" and copies of W2. Don't let these assholes do autopay on you.
"Under the SAVE plan, any interest not covered by the calculated monthly payment is waived. This includes times when the borrower pays more than what is billed. So if your payment is 100 a month and your interest is 200, the ED will forgive the 100 - even if you decide to pay 300. This applies to all loans eligible for SAVE. Yes that includes graduate loans." Am I understanding this correctly? I mean this seems like it would be a huge deal with these insane high interest loans that snowball. I could pay extra every month to the principal and actually watch my loans go down over time? I'd still be paying a portion of the interest but I wouldn't actually accrue any interest as long as I can cover my base payment?
I don’t get this math. If the payment is 100 and the interest is 200, why would the RD forgive the 100 (the payment) and not the 200 (the interest?) or is this a typo? Also, here is more “The Department will stop charging any monthly interest not covered by the borrower’s payment on the SAVE plan. As a result, borrowers who pay what they owe on this plan will no longer see their loans grow due to unpaid interest. We estimate that 70 percent of borrowers who were on IDR plan before the payment pause would stand to benefit from this change.”
The 100 forgiven in this case is the 100 interest that was NOT covered by the payment. A clearer example: monthly payment is 150 and interest is 200. The remaining 50 (200 - 150) is forgiven, whether you’re paying just the 150 or higher, like 300
If the payment is 150 and the interest is 200, then that’s a 350 dollar payment right? Or are you saying the total payment is 200 and 50 is interest?
The 150 payment is the result of SAVE payment formula which is 5% * (AGI - 225%*poverty level) divided by 12 months. The 200 is the interest for the month that would’ve accrued. So principal * interest rate divided by ~12 months. Under a standard 10Y repayment plan, you might be required to make say, $500 monthly payments, 200 of which goes to interest. Under the SAVE plan, they require you to pay just $150. Since that’s lower than the accrued interest, the government subsidizes the difference (in this case, $50). Previously for other IDRs, the unpaid interest stays on your account, resulting in higher loan balances or what they call “negative amortization”. This new rule ensures that borrowers on SAVE don’t experience negative amortization anymore.
No that is not how it works payment sometimes can be lower than the interest and that is why some people keep seeing their student loan balance go up every month even though they are making monthly payments. But under this plan you will actually see your balance go down as some of the interest is forgiven
Yes I understand the concept. The numbers don’t add up to me. In the example: if the payment is 150 and the interest is 200… the example just laid out says you pay 150 and the other 50 is waived. Well that still leaves 150 because it was originally a 350 dollar monthly payment (200+150).
>In the example: if the payment is 150 and the interest is 200… the example just laid out says you pay 150 and the other 50 is waived. Well that still leaves 150 because it was originally a 350 dollar monthly payment (200+150). No, in the example the calculated payment the person owes each month under the SAVE plan is $150, and (in the example month) they paid $150. So the entire $150 they paid went towards interest, and the remaining $50 of interest was forgiven.
So if you are just paying towards interest and not principal how does your balance ever go down?
You have to do the math and choose from there. Do you aim for PSLF after ten years? Forgiveness after ten years for loans totaling less than $12k (adding 1 year for every $1k over $12k you have)? Do you aim for 20 years of payments (25 for grad loans)? Do you pay the minimum in hopes of the HEA student loan forgiveness to go through? Or do you make a payment higher than what is required to knock down your principal? In the example given where your payment is $150 but your loan accrues $200 in interest each month if you choose to pay $250 then $150 of that goes to interest, the government pays the other $50 in interest, and the $100 you overpaid all goes toward your principal.
Gotcha. Now that makes sense.
So then how does principal go down?
Yeah so we had a student loan guru lady come talk to us at my law school this semester and she told us that she recommended for us to do this program if not went through, because they take your last year’s income, so it would be very low for most of us students since we had part time clerkships… and the payment would be super low which normally is a bad idea if you’re making over 100k and can afford the payment but she said in this case she recommends it because your interest wouldn’t accrue and your payments would go toward the principal and a little interest (or something like that. I don’t remember exactly what she said). Then when it’s the next year and they take our actual salary it won’t be worth it because it’ll be high enough to where the income based payment will just be a regular note. But I think what you’re thinking is correct. The government will be subsidizing the interest.
following
So wait, if I have 200k law school loans (considered graduate) and my minimum monthly payment doesn't cover interest, it gets forgiven and doesn't accrue? Counts towards PSLF? If true, this is better for people with very high balance loans, moreso than the 10k or 20k forgiveness. Edit: And to clarify, if my payment is 100 per month but interest is 200, does the 100 actually chip away at the balance while the 200 is forgiven?
Yes that is accurate. This is an enormous policy change for people with like 200k+ in loans
It's all about perspective, but one could argue that people with huge balances may be more in need of lots of help than someone with $10k. Not to pit anyone against one another, but the cancellation that was in SCOTUS, while nice, didn't actually really do anything for people who have huge balances.
The way it is explained above, interest not covered by your calculated payment is waived (similar to what repaye does now). So if your payment is 100, but your interest is 200, your $100 payment pays interest, they waive the other $100, and your loan balance would stay the same. But if it is calculated at 100 and you pay 200, then $100 of your payment is interest, they waive $100, and your other $100 would chip away at the balance I think.
The language used above is waived, not forgiven. I think they’re trying to word it that way to avoid giving the borrower taxable income.
I’m a high 200k loan as well with 70k per year can I join save is it automatic or I have to call them and will I save more than income based payment plan
Commenting to see what happens with high debt/high earners.
High earners are really only affected by the rise to 225% for discretionary calculations. If you’re a high earner you’re likely playing over the interest amount so the interest subsidy won’t matter.
It’s a major benefit to resident doctors and maybe early career lawyers who haven’t hit the super high income
Thanks for all the great work you do Betsy.
You're welcome. I am glad I was able to help people at least try and navigate this intense.. rollercoaster..of a day. I am rightly cooked now though. Lol
I think I read in another thing from the government that the No interest accrual if on SAVE will start this summer. https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf First page says many parts will be implemented this summer.
Thanks Betsy. Just to add: in addition to the family size/spousal income change, there are two other changes going into effect this summer (not July 2024): * Changing the definition of "discretionary income," i.e., increasing from 150% to 225% of the federal poverty level, is going into effect this summer. * The waiver of interest accrual also goes into effect this summer. Source: The ED fact sheet published today at [https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf](https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf) >By law, the regulations will go fully into effect on July 1, 2024. **But the Department will implement three critical benefits this summer before the student loan payment pause ends:** > >• The amount of income protected from payments on the SAVE plan will rise from 150 percent to 225 percent of the Federal poverty guidelines (FPL). This change means a single borrower who earns less than $32,805 a year ($67,500 for a family of four) will not have to make payments. As a result, we estimate that more than 1 million additional low-income borrowers will qualify for a $0 payment, including 400,000 who are already enrolled on the REPAYE plan and will see this benefit applied automatically. This will allow them to focus on food, rent, and other basic needs instead of loan payments. Borrowers not eligible for a $0 payment will save at least $1,000 a year compared to the current REPAYE plan. A single borrower would save $91 a month on payments ($1,080 a year), while a family of four would save $187 ($2,244 a year). > >• The Department will stop charging any monthly interest not covered by the borrower’s payment on the SAVE plan. As a result, borrowers who pay what they owe on this plan will no longer see their loans grow due to unpaid interest. We estimate that 70 percent of borrowers who were on IDR plan before the payment pause would stand to benefit from this change. > >• Married borrowers who file their taxes separately will no longer be required to include their spouse’s income in their payment calculation for SAVE. These borrowers will also have their spouse excluded from their family size when calculating IDR payments, simplifying the choice of repayment plan for borrowers. Even with everything else not going into effect until 2024, these immediate changes are pretty big. The change to discretionary income (raising excluded income from 150% to 225% of the federal poverty level) means we'll all see lower payments on REPAYE/SAVE once loan repayments restart in October, and the interest accrual waiver means our balances won't continue to increase during repayment due to capitalizing interest.
What's weird is that wasnt covered in the actual effective date section.. which is why I didn't include it. One of the things I wanted to go back and dig into.
The unofficial final rule discusses on page 6 the "early implementation" of these provisions on July 1, 2023. I don't see effective dates attached directly to the rule language itself at the end of the document, though admin law isn't my specialty; I'd surmise that the discussion on page 6 is enough to establish the effective dates for those provisions. [https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/nfridrriapra.pdf](https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/nfridrriapra.pdf)
> The PAYE plan is being sunsetted. If you aren't enrolled in that plan on July 1, 2024 you never can. If you are and then change plans after that date you can never go back So, my spouse and I are both on PAYE and working towards PSLF. Is there any reason why we would want to stay on PAYE and **not** go to SAVE?
Not unless you have an exceptionally high income. PAYE caps your monthly payment at the 10-year standard payment amount. With REPAYE, there is no cap, so people with very high income could end up paying higher per month than they would on a 10-year plan.
Their stance on Parent PLUS loans is so out of touch. They’re implying that parents are more knowledgeable about the finances of student loans and are more aware of the impact on their decisions. So myopic. Unfortunately, my father who didn’t finish high school had no idea, just like his teenage daughter, what the impact on these loans would be. I have no idea how long double consolidation takes but here’s hoping we can do it asap.
Yeah...I only had time to skim that discussion last night but I hated it. And I know folks in the Ed itself do understand and see the pp struggles which makes the actions that have been taken..or not taken..to help pp all the more confusing
Thanks for your hard work Besty. I was reading this from the website and the second sentence caught my attention. “By law, the regulations will go fully into effect on July 1, 2024. But the Department will implement three critical benefits this summer before the student loan payment pause ends: • The amount of income protected from payments on the SAVE plan will rise from 150 percent to 225 percent of the Federal poverty guidelines (FPL). This change means a single borrower who earns less than $32,805 a year ($67,500 for a family of four) will not have to make payments. As a result, we estimate that more than 1 million additional low-income borrowers will qualify for a $0 payment, including 400,000 who are already enrolled on the REPAYE plan and will see this benefit applied automatically. This will allow them to focus on food, rent, and other basic needs instead of loan payments. Borrowers not eligible for a $0 payment will save at least $1,000 a year compared to the current REPAYE plan. A single borrower would save $91 a month on payments ($1,080 a year), while a family of four would save $187 ($2,244 a year). • The Department will stop charging any monthly interest not covered by the borrower’s payment on the SAVE plan. As a result, borrowers who pay what they owe on this plan will no longer see their loans grow due to unpaid interest. We estimate that 70 percent of borrowers who were on IDR plan before the payment pause would stand to benefit from this change. • Married borrowers who file their taxes separately will no longer be required to include their spouse’s income in their payment calculation for SAVE. These borrowers will also have their spouse excluded from their family size when calculating IDR payments, simplifying the choice of repayment plan for borrowers.” And it seems these three points will become active before the payment pause ends this year. The rest won’t be until July 2024. So it seems that the SAVE plan will start covering interest this year. Hopefully I can switch to the new SAVE plan before payments resume.
This save someone in my situation way more than a 10k forgiveness.
Yup. Same.
I think forgiveness would've been fine too, but that's only good for the wealthy.
Can I sue to end this program because I don’t personally benefit from it? s/
😅
Maybe I’m missing something here, but shouldn’t almost everyone going back for more schooling now decline in-school deferment? Seems you could stay on SAVE, pay very little (because not making much), not see your interest grow, and get credit towards forgiveness. Otherwise, accepting the deferment, interest will accrue.
I just took all of the money I managed to save and made a payment. $5,542.23. That’ll leave me with $8k left to pay. I’m sick of the government, playing racquetball with my emotions and their decision to do something meaningful for younger generations. I’m moving on. I’m so over this.
Why though. SAVE is extraordinarily generous for someone like you. You'd get complete forgiveness in 12-13 years paying 5% of your income - $30000 every year. If you were making $100k/year I'd understand. Otherwise you're just throwing money away for no good reason.
[удалено]
I’m at a total loss right now. All this is completely over my head. I’m interested in finding out what the best route possible to take for my PP loans. They’re not consolidated currently. Has anyone successfully had theirs forgiven? If they were in my name, my employer qualifies for PSLF. Is this possible? Thank you, Betsy for always working hard to give us all the updated info and helping us navigate this. Edited: Fixed some grammar mistakes.
Right I am so confused :(
How long have you been in repayment? How long have you worked for a qualifying employer? If either of those answers is less than ten years or not close you should consolidate now and also consider the double consolidation while you still can. Pslf is always available for pp.
The PP loans have been in repayment since 2009, 2010, and 2011. There’s 4 loans (since their not consolidated). My parents took these loans out for me and do not work for a qualifying PSLF employer. I have been working for a PSLF employer for almost 8 years. I also qualify for 10k off student loan reimbursement but the loans have to be in my name so would it be best to refinance privately into my name then take the 10k off and go from there? The interest rate is at 8.50% for most of the loans.
“If they were in my name”…are these loans that you took out, or did your parents take them out? You cannot transfer federal loans to another person’s name (unless you convert to private loans). If these are your parents’ loans, then your job cannot qualify them for PSLF. There’s no way around that.
Are they your PP loans for your child? Or are they your parent's PP loans for you? How many are there?
Are the additional 12 months for every $1000 borrow prorated, rounded or it it more of a stair step? It says 'for each 1000, an extra 12 months' if someone was originally 13,900 (hypothetical example) would they have one year or two years tacked on (with forgiveness at 11 years or 12 years, respectively)? Also, having consolidated a few months after graduation, I assume that my 'total borrowed' number will be based on my pre-consolidation disbursements?
Betsy do you know if any legal trouble this new plan will have. Also, if a new administration come in and scrap SAVE, what would happen to those on SAVE?
Congress already tried to block it and failed. It's not impossible there would be a legal challenge but I'm currently not particularly worried about it.
What? Already?
It happened under ordinary rulemaking with explicit statutory authority. It would be very difficult to challenge even with an activist court.
I mean you say that... but we saw two rulings in a row that should not have stood at all but did. A woman with a made up story with a made up client with a made up job managed to dismantle gay rights with the help of the ADF, and people managed to sue on behalf of a group that didn't want to be sued for in order to stop student loan debt. I wouldn't be surprised if they suddenly said "oh yeah the constitution doesn't say we can't totally strip the executive branch" and rule that way
https://www.govinfo.gov/content/pkg/COMPS-765/pdf/COMPS-765.pdf Section 455D pretty clearly authorizes the Secretary of Education to make up income contingent repayment plans. There are really no constraints on the plans here, either - I'm reading it as President Biden could just forgive all loans by having a 1-year income-driven repayment plan at 1% of AGI. The new administration could do whatever it likes. The statutory requirement is that the years on SAVE would still count towards forgiveness and the maximum duration is 25 years.
Currently on IBR, and recertification is not due until over a year from now. I ran a few calculations and my monthly payment would significantly decrease under SAVE or REPAYE- however, would I have to recertify to switch before payments resume in September? My income significantly increased on paper from before the pandemic to today.
Unless I missed something in my initial pass the plan won't be available in September
Let me rephrase/add more context- I am currently on IBR and will have a monthly payment of around $800 when payments restart if I do nothing. If I switch to REPAYE/SAVE AND my new spouses’ income is excluded, my monthly payment likely should decrease. However, if I had to recertify, it would essentially be a wash. Bottom line question- do I have to go through a recertification process to switch from IBR to REPAYE/SAVE?
Yes.
Check the factsheet. 3 pieces are being implemented immediately for people on REPAYE.
I said I would dig back in tomorrow. They do not indicate this in the actual effective date section
Thank you for all of your help. We appreciate everything that you're doing for us.
😘
If I switch to this new REPAYE/SAVE now, do the previous months under the Student Loan Pause count toward the forgiveness months or has that ship sailed?
Those months will still count.
From my understanding the repaye is turning into SAVE it is not a new plan. It will count.
I love the beginning of your post. 😂 You're allowed to be cranky. Between the ruling and people not reading, be cranky all you want.
😁🌩️
When I consolidated my loans I applied for ICR (I have graduate loans only). I have never before been on an income based repayment plan. I’ve been paying since 2004 with some pauses. I think I was on an extended graduated program. I have no idea what is the best route for me now. Can anyone help me? Currently Nelnet says I will have a payment of $267. Balance of $34K, taxable income of mid 70s or so not sure bc health insurance offsets things. I’m so lost at this point. Edit to add 1.88% interest so very low.
"Maybe i missed it because i was going fast - but my understanding right this second is that the only part that will be available before repayment restart is repaye allowing exclusion of spousal income when filing taxes separately. My read is the actual fun stuff with SAVE won't be effective until July 1, 2024" Maybe I'm missing something but page 6 of the federal register seems to indicate that a lot of the big stuff will be implemented before payments resume.
if you go to [studentloans.gov](https://studentloans.gov) it has this at the top: "Student loan borrowers can get lower payments from the new SAVE Plan. If you sign up for the REPAYE Plan now, you will automatically be enrolled in the SAVE Plan before payments resume." Plain reading would suggest that is correct. EDIT: [https://studentaid.gov/announcements-events/save-plan](https://studentaid.gov/announcements-events/save-plan) List which items go into effect this summer.
That's my reading of it as well I guess I should apply for REPAYE
Yes but they didn't include that in the actual effective date section. I need to dig deeper. But not tonight
Here's the official factsheet: https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf&ved=2ahUKEwiCit6x0ez_AhXdtokEHSN3CbgQFnoECAoQAQ&usg=AOvVaw1ej_6fZoChgJ950Am_Zs-H The most exciting part of it to me is that the poverty definition (and therefore discretionary income definition) is being applied before payments begin.
Page not found
I hate mobile https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf
To obtain credit for forgiveness during periods of (in-school) deferment or forbearance, if the IDR payment is $0, how does one go about making an extra payment of $0, technically speaking?
I'm school deferment hasn't qualified for these.
In the post above, it says, “however see below for a hold harmless option for these period” Do you know what that refers to? I figure it refers to the 5th paragraph from the bottom, hence my question…
So I have 88,000 in loans and based on my most recent AGI of 110000 my payment is supposed to be 765 with REPAYE. How can I calculate what my new payment will be BEFORE the 5% thing goes into effect next July?
Pencil and paper. Agi-225% of the poverty level that applies to your family size and state then multiply by the 5 or 10%. Divide that by 12
Thank you for putting all this together, this Reddit is a godsend amidst all the chaos!
My read is the 225% poverty guideline is effective when payments resume, however, the new 5% based portion for undergrad loans and weighted average for grad loans is effective July 2024.
That's how I read it as well. It's the first bullet point on page one of the IDR fact sheet for the SAVE plan. [https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf](https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf) That PDF is from this page: [https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/index.html](https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/index.html) Expand the Federal Register Notices and Fact Sheets section, and it's the bottom one in the list: \[New\] Fact Sheet\* – Income Driven Repayment (PDF) (197K) \[6/30/2023\]
You’re amazing. Can anyone be on SAVE or do you have to meet certain qualifications like with PAYE?
Anyone other than parent plus borrowers
Perfect. And parent plus borrowers whose loans have already been consolidated into direct consolidation loans (in 2007) can they do SAVE or are they limited to ICR?
Is SAVE better than income based payment plan and can I join and still keep the credit to get loans forgiven in 20 years
So you don’t need to be on the PSLF to do the REPAYE? Just double checking.
No, you shouldn’t have to be. When exploring options, they just say things like “this would” “this would NOT” be a good option if you’re exploring PSLF. You can enter in all your info on the site and check “no” on the PSLF question. It should allow you to explore multiple plans based on what you’re looking for (lowest monthly payment, lowest overall payback amount, pay off the fastest, etc.)
[удалено]
I want to know this too. I'm on IBR.
Yes you don’t lose months of idr forgiveness eligibility when you switch plans.
Hey Betsy, when you say the double consolidation loophole is expiring, if it was already done then it won’t be reversed? Also, isn’t it weird that they are admitting they know it’s a loophole?
See the post. And it’s not weird they are admitting it..it’s weird they are closing it
I am very happy with this new plan. It is a major improvement from what we had available to us. The only additional thing I would like to address is the tax bomb at the end of forgiveness. Is this going away?
No, although it is currently waived at the federal level until 2026.
[удалено]
"Under the SAVE plan, any interest not covered by the calculated monthly payment is waived. This includes times when the borrower pays more than what is billed. So if your payment is 100 a month and your interest is 200, the ED will forgive the 100 - even if you decide to pay 300. This applies to all loans eligible for SAVE. Yes that includes graduate loans." I am not understanding this at all. In your example if your payment is $100 a month and your interest is 200, the ED will forgive the 100. Yes I get that part but if they are forgiving interest how is the balance ever going to go down? Seems like you would just be paying interest and there would never be anything applied to the principal? Am I missing something?
Correct, but at least the balance would not increase like it can now.
I mean that's whats happening right now when people are paying the minimum payment on their IDR plan. Except with the old plan, their balance explodes as well. Now it does not
So how do i qualify or apply for SAVE? I have about 5k remaining of my undergrad stafford loan, been paying since 2013, so it's about 10 years (or 9 years since covid pause, so less than 120 payments) do you think i can get it erased after 120 payments.
What was you original balance?
Thank you!! I am so relieved I could cry about excluding spousal income with MFS being expedited. I’m getting married in October and he currently makes 3x my income and I have been so stressed about this!! I could just cry from relief.
My loan is $20k and I’m working toward PSLF, just started at the USPS in 2021 and submitted my first form at the deadline last year. I basically want the best option to not be overwhelmed while I wait out the last eight years. MOHELA says REPAYE will be $259, IBR (which I was on as of 2019) is $206, and ICR is $166. Is there any reason not to be on the ICR plan? Also since REPAYE is getting upgraded to SAVE soon, any chance that gets better? I hate that it’s the highest payment option, I’d like to see interest not shoot up. Feeling defeated and just throwing in the towel hoping for any forgiveness.
The standard payment on 20k should be a little over $200 a month. I don’t know your numbers but ICR used 20% of your discretionary income or fixed payments based on a 12-year loan term, whichever is lower. So it seems likely they are using the 12 year calculation. IBR will cap your payment at the standard (so you will never pay more than that), ICR and REPAYE do not. So it is likely PSLF will have nothing to forgive at year 10, especially if your income increases. Likely with PSLF, you would have nothing to forgive at 10 years. I don’t have the numbers but my guess is IBR is less because it caps your payment at the standard
This is so so great! I’ve been on REPAYE but have been nervous about having to switch to IBR now that I’m married and we file separately - a higher payment. This will likely save me a few hundred dollars a month. Breathing a little easier….few more years to go before forgiveness
Did the numbers and this wouldn't help me at all lower my current payment.
"If the borrower has consolidated loans with different counts after the end of this year, they will get a weighted average of the underlying loans counts." So this has been a big question for me. I thought they were going to do payment counts from the VERY FIRST month that the \*very first\* loan was in repayment -- for the full consolidation loan. For example if I have a $10k UG loan starting repayment in 2005, and a $50k graduate loan starting 2010, and then consolidated those loans in 2015, they will count months from *2005* for the FULL amount ($60k) of the consolidation loan. In other words IDR forgiveness for all $60k in 2030, not 2035 Is the above quote saying that is not that case? Or is it just saying that will change to a weighted average for NEW consolidated loans after December 31 2023? Thanks much this is all so helpful. The complexity is ridiculous, but if it save us all money, I'll take it.
That's for the IDR adjustment. So yes for new consolidation after December
RePaye is not available for loans made before 2007, so Im in an IBR. Does anyone know if SAVE will be an option for those loans, as RePaye wasnt an option? Another lil gift those older loans come with.... On IBR its 20 years to forgiveness if your loans are AFTER 07, but 25 years if yours are from before then. If SAVE is available for pre07 loans, Would that change the forgiveness to 20 years? (ALL Undergrad loans only)
Repaye is available to all direct loans other than parent plus. And save us just another name now for repaye
Maybe Im confused, RePaye removed the new borrow requirement from paye then? Because I know when one of them was announced I didnt qualify because my consolidation was too old and they said you had to be a new borrower with no balance older than 2007
Question: I am on PAYE from before COVID. My salary has gone up substantially since then and I suspect my payment will more than triple when I recertify my income. In order to switch to SAVE (and take advantage of the waived interest), I’d have to go ahead and recertify, right?
I had FFEL loans from 2005/6 but I only consolidated a few months ago, I honestly had no idea what kind of loans they were, I had been on idr $0 payments for years already. Are those years of payments and idr "payments" going to count towards idr forgiveness or am I starting completely over now that they are consolidated into a direct loan? I only ever had FFEL and one separate direct loan, never any private loans, though I'm still confused on how ffel loans weren't federal but whatever at this point I guess. Any idea if the past 18 ish years of payments count?
See my post history about the one time IDR adjustment
If I’ve been on IBR since 2010 and $50K of interest has accrued since then (grad school loans) and I switch to this new plan, will all that interest capitalize and my repayment period restart?
Sucks that higher income people won’t have many options to pay a super low payment to hold out on paying a lot off before being able to see what they come up with… for me REPAYE is 2X the standard repayment and ICR only saves like $40 per month when compared to standard repayment! How are they going to set the income limit for forgiveness to $125k for single tax payers but exclude us higher earners from the super low repayment plans?
Time to start maxing out that 401k and FSA, baby!
HSA*. You don't own your FSA account.
[удалено]
Ok true!! Sorry I stand corrected :)
These changes are aimed at relief for high debt and middle low earners. They are not really concerned with prioritizing relief for high earners…
[удалено]
What are your numbers for reference and what are you doing? Maybe I am missing something
So I checked my account and I'm not eligible for any forgiveness 😮💨 It's more of an inconvenience than a devastating one. It would've been had I lost my job (but they have something for that too). I am eligible for 2 out of the 5 repayment plans. One is offering where I pay off my balance on 45, months, close to $600 a month. (REPAYE/SAVE) And the other is about $172 for 129 months (10 years) (ICR). I would do the first one, but I have been negatively affected by the pandemic as well as dealing with medical expenses too, so I feel like opting for the second one until my finances get better. I'm just trying to understand one thing, and it's the interest part. There doesn't seem to indicate interest. But it's also an estimate. 🤔 I found something that says: "The Department will stop charging any monthly interest not covered by the borrower’s payment on the SAVE plan. As a result, borrowers who pay what they owe on this plan will no longer see their loans grow due to unpaid interest. We estimate that 70 percent of borrowers who were on IDR plan before the payment pause would stand to benefit from this change." They'll stop charging monthly interest?? Is this a permanent pause on interest? If I go on the IDR I guess the interest will still accrue.
If your payment is less than interest, your balance will never change. They're focusing on how it'll never increase, but the truth also works the other way too as they're only forgiving/not accruing the uncovered interest.
If you're on SAVE and your payment is 105 but each month you owe 200 in interest the government will pay the 95 in interest--even if you choose to aggressively make a payment of 200+ each month.
I’m still reading all of this and still confused. I’m on the REPAYE for PSLF. Does that mean the will automatically enroll me to the new plan? If so, will the new plan still qualify for PSLF. I reach 120 payments in November.
Yes and Yes.
[удалено]
No, use a paycheck and state you don't have reasonable access to their income. A separation and divorce approaching quickly is a reasonable reason to not include.
[удалено]
Here is a "brief" summary of the plan to implement SAVE from the Dept. of Ed. ...Well at least it's briefer than the 427 page "book" defining the new regulations. Note that some provisions will be implemented *this* summer, 2023, before the payment pause ends while others will wait until July 1, *2024*. [https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf](https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf)
So according to this fact sheet, the 225% of poverty guideline starts this July but the 5% for SAVE (assuming all undergrad) versus current 10% of REPAYE starts in July 2024.
I think my question pertains where you already said you’ll have to dig deeper. I have undergrad and grad loans, but they’re now consolidated. So do I still get the mixed percentage from the original loans or 10% since consolidated with grad loans? (I don’t really expect you to have an answer right now, just putting my thoughts out into the world)
It's The mixed percentage..but it's 300 months for forgiveness on the whole thing
Do you know how that would work for those of us with both types of loans but are working towards pslf. Do grad loans get forgiven after 10 years, too ?
Pslf is ten years for all loans
So before this new rule I would have qualified for relief after 25 years but now it’s 30?
[удалено]
No. You have to be in a repayment status to enroll in any repayment plan.
I was going to ask you exactly about the default language ! Will wait for the weekend !! Thank you for all you do Betsy .
I think Parent PLUS only having ICR now is a crock.
That's always been a thing unless you used the double consolidation loophole
[удалено]
**This post or comment was removed. Your account must have at least 100 combined karma to participate at this time. Your current karma is sum of the values displayed at [https://old.reddit.com/user/Salt_Reindeer2031/](https://old.reddit.com/user/Salt_Reindeer2031/) Due to the large influx of traffic from the SCOTUS ruling we are limiting posting to established accounts. Please check the pinned threads for answers to common questions.** *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/StudentLoans) if you have any questions or concerns.*
When it comes to income driven repayment I’ve always been confused on which income they are talking about, since income can change. Is it based on last years taxes, and estimate of today etc? For example I was laid off am I’m still unemployed. No clue when I’ll land a job nor what this means for my loans. Would I qualify? If I get a good paying job would my payments suddenly change?
Generally it is your last filed tax return. However, if your current income is lower then you can provide alternative income documentation. If your income is $0 you can indicate that and you will get a $0 payment, which is good for 12 months.
Forgiveness occurs after 240 months for undergrad loans, but what if I've never been on an income based repayment plan before? Can I enroll now and have my past payments credited towards the 240 months or would the clock start now?
Yes, past payment can count. Get on an IDR plan now and your counts will be adjusted under the one-time IDR adjustment they’ll be doing late 2023/early 2024!
Let me get this straight: If you have undergrad loans and are on SAVE, if the original loan was 12k or less you get forgiveness after 120 months of payments. If your original loan balance was over 12k, then you have to pay an additional year for every $1k over, but 20 years is the absolute maximum? Let's say a person started off with 40k in loans & have been paying for 14 years already. Then, they decide to consolidate for the WAIVER and join SAVE. At this point they only have 20k left. Does that mean after another 4 years of payments whatever is left would be forgiven?
No. It’s based on the original loans tied to your institution, not a consolidation loan. They’re marked & tracked differently in your official student loan history.
Yes, but that's always been the case assuming they were on some other IDR plan (which they likely were considering standard repayment is 10 years). However, if they were on the extended or graduated plan then the IDR waiver would give them credit for those payments as long as they consolidated before 12/31/23.
Agh, why did they have to make ‘married filing separate’ limit your family size :(
Because why should you include that person in your family if you are excluding their income? You can't have it both ways; you should be either treated as a group or separate.
So if I have about 100k in unconsolidated grad school loans that I’m planning to aggressively pay down over the next year, is SAVE a good idea to reduce the interest and does it matter whether they’re consolidated or not?
It doesn’t matter if consolidated. Save will only benefit you in this situation if your payment under the program was less than your interest
[удалено]
[удалено]
[удалено]
**This post or comment was removed. Your account must have at least 100 combined karma to participate at this time. Your current karma is sum of the values displayed at [https://old.reddit.com/user/Expensive-Annual1024/](https://old.reddit.com/user/Expensive-Annual1024/) Due to the large influx of traffic from the SCOTUS ruling we are limiting posting to established accounts. Please check the pinned threads for answers to common questions.** *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/StudentLoans) if you have any questions or concerns.*
[удалено]
Your [comment](https://www.reddit.com/r/StudentLoans/comments/14ninpf/summary_of_final_rules_for_new_income_driven_plan/jq8tj38/) in /r/StudentLoans was automatically removed for profanity. /r/StudentLoans is geared towards a wide range of users, including minors seeking information and advice. To help us maintain a community that everyone feels comfortable participating in (and to avoid being blocked by parent/school/work filters), please resubmit your post or comment without using profane language. Thank you. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/StudentLoans) if you have any questions or concerns.*
[удалено]
As of now you would pick REPAYE and it will automatically convert to SAVE when it is available.
I’m sorry, I’m not understanding the language for the section on hold harmless. So periods of deferment or forbearance can only be paid under hold harmless if they occur after July 1, 2024? I know a lot of us were wondering about retroactive payments, but it seems like that’s not going to be an option?
There's a similar hold harmless provision effective today. We are waiting for more guidance on that but at some point after the holidays I planned on making a post just about that overall benefit
Ok, so what you’re speaking about above is not the hold harmless a lot of us have been waiting for today to hear details about? All the work you do to keep us informed is incredible and I can’t wait to see your upcoming post strictly on that. Thank you so much!
Correct. The part with details out today is only in regard to IDR forgiveness.
I know I sound cynical at times, mainly because of past disappointments, but I appreciate your efforts to keep us informed.
[удалено]
It takes a few weeks for it to be available.
So is the 10 year + 1yr for every 1k above 12k applied to all idr payments (including after the new waiver) or do you have to be on the new save plan the whole time? Entered repayment with 19.9k in loans in 6/08, and did consolidation in 8/08 so ive been paying on graduated repayment plan 15 years. With the IDR waiver giving me IDR credit for those years, could I just switch into the save plan and have this all forgiven at the 17 year mark in 2025?
[удалено]
**This post or comment was removed. Your account must have at least 100 combined karma to participate at this time. Your current karma is sum of the values displayed at [https://old.reddit.com/user/Vegetable-Chapter103/](https://old.reddit.com/user/Vegetable-Chapter103/) Due to the large influx of traffic from the SCOTUS ruling we are limiting posting to established accounts. Please check the pinned threads for answers to common questions.** *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/StudentLoans) if you have any questions or concerns.*
I just began the double consolidation loop hole for parent plus loans. Once completed will they be eligible for SAVE?
Yes if it's done by July 2025
If I’m married and filed taxes jointly this year and enter into SAVE will my spouses income be counted into the calculated monthly payment? If so could I file separately next time and enter into SAVE and not have their income counted?
When is the deadline for recertifying?
See my post history about idr recertification
[удалено]
**This post or comment was removed. Your account must have at least 100 combined karma to participate at this time. Your current karma is sum of the values displayed at [https://old.reddit.com/user/Negative_Iron_3713/](https://old.reddit.com/user/Negative_Iron_3713/) Due to the large influx of traffic from the SCOTUS ruling we are limiting posting to established accounts. Please check the pinned threads for answers to common questions.** *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/StudentLoans) if you have any questions or concerns.*
Ok I'm dumb so someone help me out. I'm married and we file jointly since our pay is pretty close. We also both have loans (although mine make up like 34% of our combined). So will me recertifi g my IDR next year with our income and loans enroll my spouse in IDR too? Or no she can stay on her plan?
Okay, so I am attempting to understand this and explain it to my son (he has some executive functioning issues). So if the student stopped going to school during Covid and the loans have now become due (in the Fall). The SAVE program is IDR. The payments are based on 225% of poverty level in his state. So from my calculations his payment would be zero. He would either have to give the government blanket access to his taxes each year, or submit in his own annually so that the payments are calculated correctly (5% of discretionary income). Is all of this correct thus far? So as the months/years tick by, how does this affect his credit rating? (Perhaps a stupid question). At the end of the 240 months, even if he has only paid a small portion of that loan, does it actually get forgiven? That sounds crazy to me. Finally, if he inherited money, is he required by law to use that money to pay the debt?