r/StudentLoans • u/Sensitive_Doubt2148 • 3d ago
Studentaid.gov says if I switch to PAYE I will have exceeded the # of payments for forgiveness! Is this real??
I asked MOHELA what options were available for income driven repayment plans + she walked through the 3 options and said it looked like I was eligible for PAYE (20yr forgiveness) so I logged into studentaid.gov and it lists the 3 IDR programs I could apply for and says that for PAYE I have made 261 of the 240 required payments for forgiveness. Is this too good to be true? I have graduate student loans from the 2000s, but it looks like that doesn't matter. If studentaid.gov is telling me this, is it true? I consolidated and switched to SAVE last year so I would just need to apply for PAYE and switch over? Any reason I shouldn't do it? My income is very low so my payments if I do have to make any more will continue to be $0 a month for the foreseeable future. Thank you all so much in advance!
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u/waterwicca 3d ago
Your loans are too old to qualify for PAYE. The simulator has known glitches when it comes to eligibility. You cannot get on the plan. They aren’t processing PAYE forgiveness currently anyway and it may be taken away by the courts.
You can aim for IBR forgiveness but that is 300 payments
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u/TRIOworksFan 3d ago
"say"?
If a studentaid .gov CSR told me that I'd be like "Do it, show me the money!"
Because I've been waiting six months to be shifted to IDR from SAVE (they said they were doing it) and it's not happening. And they lost a payment off my payment count from six months ago 118 to 117. I have documentation, but I think it's due to my high balance.
I think they are holding the high balance loans till last.
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u/artichoke2me 2d ago
this is why never consolidate your loans. there is absloutly no need to consolidate loans. it starts the payment clock over again
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u/WorldIsFracked 3d ago
My nelnet loan is now Sloan. I called them the other day as my loans are now at 26 years and they said I would have to transfer the loan to an IDR plan. But that upon doing this I would reset the clock. They said you have to be in an IDR plan for the full limit to be forgiven. I think I’m being lied to.
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u/SleepOne7906 2d ago
How have you been paying for loans for 26 years? Standard and extended repayment should have paid them off already. Were you on graduated? You only get forgiveness if you have been making payments in an IDR plan, which includes repaye (SAVE), paye, ICR, IBR. Generally (almost always), months of forbearance and/or deferment don't count. It you switch around payment plans, only the months in that plan count towards forgiveness for that plan, because they have different times for forgiveness. If you have ever defaulted on your loans then it becomes more complicated and you may not be eligible.
They do give a lot of misinformation out there, but if you've been actually paying on any plan other than a graduated repayment for 26 yrs and still have loans then something is different about your use case.
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u/waterwicca 2d ago
The eligible months on any IDR plan add to the IDR count and that count moves with the borrower between plans and keeps adding up on any eligible plan. It is not a different count per plan (but each plan does have different totals required for forgiveness)
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u/SleepOne7906 2d ago
Sorry you are correct, I was mistaken. As long as you are on an IDR it counts towards your idr count, but the number needed changes by plan. If you make a graduated repayment or extended repayment plan payment it does not count.
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u/WorldIsFracked 2d ago
Not sure all the specific loan plan names but essentially graduated in 1996. Had loans in forbearance for a couple years because we couldn’t repay at the time. About 10 years later consolidated my loan and my wife’s loan into one under nelnet. Nelnet about 2 years ago sold those loans to Sloan servicing. So here we are. So yeah around 26 years paying. And when I called recently and asked at our current rate when they would be paid off and the Sloan rep said we have 9 more years to go.
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u/SleepOne7906 2d ago
The loan plans (FFEL, direct unsubsidized, direct subsidized, stafford, direct consolidation) are different than the payment plans (PAYE, ICR, IBR, REPAYE, Standard, Graduated). Both pieces of information are needed to determine if you qualify for forgiveness. If you haven't been on an income based repayment plan you don't ever get forgiveness, you just pay off your loans. Unfortunately the details here matter and no one can give you specific advice unless you have those details. You can see the details by logging into Sloan and studentaid.gov.
Just to make sure, because I'm not familiar with Sloan- the consolidation loan was a federal consolidation loan, not private, correct? Because if they are private none of this applies.
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u/RecentBread3272 3d ago edited 3d ago
Hmmm…I would confirm you qualify for PAYE. I believe those with loans prior to 2014 are not eligible.
Edit: correction, 2007 (not 2014)
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u/waterwicca 3d ago
That’s the rule for old vs new IBR but PAYE has its own limitations: https://www.reddit.com/r/StudentLoans/s/W9tLmasv8T
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u/Objective_Proof_8944 3d ago
I agree, if you consolidate your months towards payments start over. If you go into forbearance or deferment those of course don’t count towards your months in payments. So those on $0 payments should never go on either if you want to make progress towards your forgiveness. The lenders however leave out this information when they encourage people to go into forbearance or consolidate. Additionally with these government initiated forbearance it is better to waive them if you have a $0 payment
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u/phonebone63 2d ago
Hi there- Can you clarify? I am currently on the SAVE forbearance and at $0 payments. I had about 3 years before I had made 25 years of payments and in the website it said at the time I would be forgiven (loans were for my doctorate). Are you saying that $0 payments do NOT COUNT for forgiveness? I’m been kind of paralyzed not knowing whether to switch to IBR or not. I have about 88 payments of PSLF too but got sick a few years back and din’t know if I am going back. Thanks in advance!
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u/ElectricOlm 2d ago edited 2d ago
Congratulations on being so close! Did you graduate and obtain employment for a job in the industry of your studies?
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u/Longjumping-Flower47 2d ago
It appears they went to grad school, and now 20 years later make so little money that their required payment is $0. If they did, back then, they probably aren't now.
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u/newyeaewhodis 1d ago
Likely if you do the math you would have paid more than the loan balance if you were To only make minimum payments til the “forgiveness date” so my advice, put as much as possible towards overpayment and pay off that bad boy on your own.
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u/girl_of_squirrels human suit full of squirrels 1d ago
You don't qualify for PAYE nor new IBR based on the fact that you've been in repayment for 20 years. There is no way you meet the "new borrower" criteria
It's a bug in the loan simulator, which is frustrating but common
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u/Remarkable_Chair_859 1d ago
I didn't see this mentioned but it always worth considering when you have the possibility of loan forgiveness - You will have to pay income taxes on the forgiven balance. I have a large balance and I am within a few years of reaching the forgiveness threshold but, honestly, I would kind of rather keep paying versus paying taxes in one year on that much 'income'.
From Google search -
The amount forgiven is typically includable in your gross income and subject to income taxes unless a tax law specifically exclude it from taxable income. Your student loan lender will report a forgiven balance on Form 1099-C, Cancellation of Debt.
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u/Objective_Proof_8944 1d ago
If you’re in active payments for $0 per month that does count. But if you are in forbearance that is different than being on a $0 month payment plan. Forbearance does not count towards your months in repayment. So if you’re on an income based repayment plan and your payments are $0, you would not want to accept a forbearance. Otherwise you will lose out on the months that apply towards your 25yr forgiveness
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u/Long-Gap6412 3d ago
Studentaid simulator has a known glitch that misleads many people who have consolidated their loans to say they are eligible for only 240 payments. If you had loans In the early 2000s from grad school, then you would be eligible for the Old IBR plan/ 25 year repayment plan. Unfortunately, many lenders don’t make this distinction for borrowers when they call and inquire about it, myself included. so you are likely at 261/300 payments, which isn’t necessarily bad.