Hi Heather,

Thanks so much for running this site!

I am really frustrated - I finally consolidated my loans and applied for IBR.  They are all Public Loans and are now being serviced through Sallie Mae.  I got a notice from them saying that I owe $0 for a year then $2700 after that. I called to clarify and they said I can reapply for IBR after 12 months but I am only allowed IBR for three years.

I was relying on completely different information when I took out my loans.  I had the understanding that I could do IBR for 10 years (and then get PSLF which I plan to apply for).

Could you please clarify?

Thanks so much in advance.

It’s a wonder I have any hair on my head at all!  You got bad information.  They send those stupid notices because IF you don’t provide the required income verification annually, you get kicked out of IBR and into a standard payment.  There is no 3 year limit, that’s wrong.  There is an interest subsidy that lasts only for the first three years, but the length of time in IBR depends on whether a borrower earns PSLF, repays the loan in full, chooses to leave IBR, or still owes a balance after 25 years (which is the cap on the number of years in IBR).

Be sure you understand ALL the nit picky details of PSLF.  IBR is only one part of it.

HKML,

Something similar happened to me when I talked to Sallie Mae a few months ago. I had a simple question, and the guy went off on a tangent about how I could apply for IBR this time, but I would have to find another payment plan in the future (extended, graduated, etc.) because my payments would not be high enough to cover the full balance of my loans. Which, of course, defeats the whole point of IBR in the first place.

I knew the guy was full of it, but it still scared me a little. You expect your lender to be accurate about student loans, so when they say something like that, it throws you for a loop.

Thanks Zora for your comments.  As you stated, one would hope that you could trust the information you receive from your lender but it’s always best to remember that you are your best advocate.

Kind regards,

James Jarvis

FWIW,

For IBR purposes, make sure you update your income several months before the current annual payment period ends.  Last year, I never checked my “messages” at Direct Loan and submitted my new income too late to smoothly take effect.  I believe DL sent me my first message about updating income about 90 days before my annual period ended, which I never read.

My payments were kicked out of the IBR rate into the standard repayment amount, which was around $1800 per month.  However, DL seemed to be very understanding and put the loan into a deferred status where I didn’t make any payments for a couple of months and until they recieved my new income information.  So, it worked out fine, except I missed a couple of months where I could have received IBR payment credits!

This year, I’m making sure I get the info in early enough to avoid this situation.