I re-certify my income for IBR in a timely manner each year.  For the past 2 years, my servicers (my loans were transferred to a new servicer during the summer of 2013) have delayed re-certifying my income so that in November, I am expected to make a full non-IBR payment. When I have complained to my servicers, the best they can offer me is forbearance.  I have accepted the offered forbearance, simply because I cannot afford to pay $1200 a month while waiting for my servicer to re-enroll me in IBR. During my forbearance period, I continue to make monthly on time payments of what I owe under IBR.

I am planning to apply for PSLF in 7 years, so my questions are:

-Do my monthly on time payments made during the forbearance period count towards my 120 loan payments?

-Is there a way to stop my servicer from pulling these shenanigans each year?  I already re-certify my income in a timely manner.

-I am currently trying to convince my servicer to retroactively apply IBR to November 2013’s billing cycle, and remove the forbearance they applied so that I would not be in default for the portion of the full loan amount I could not afford to pay. I have spoken to a customer service representative, and sent 2 E-Mails. Is there a way to communicate to my lender what I need them to do so that they will actually do it?

Has anyone else had this issue, or is it just me?

I would also be interested in any insight that Heather or others have about this poster’s questions.

My husband and I are in a similar situation only with the 25 year forgiveness under IBR.  We enrolled in IBR in October 2013- we went to recertify this month not realizing the time it would take to process the application. When we called Fedloan they said that they could place us in forbearance while our re-certification is being processed because we cannot afford the nearly $2,000 standard payment.  They said our re-certification should be processed by November.  How will this one month forbearance affect our loan forgiveness?  The representative at Fedloan said that she is almost certain it won’t cause our “timer” to reset, and that we should make our normal payment while in forbearance that way in 25 years it will look like we made a good faith effort during this temporary forbearance.  I know it’s unlikely but I’m just concerned that an entire year of payments toward our 25 years is gone.

Another issue is the capitalization of our interest which the representative at fedloan informed us is going to occur with this temporary forbearance. It seems like there is no way around this capitalization—- we learned a valuable lesson that we need to recertify much earlier every year. The representative tried to console us up by explaining that it will all just go into the sum that will likely be forgiven anyways but as of right now we will owe income tax on that forgiven balance in 25 years so I wasn’t so easily consoled.

you are overthinking this (as I have in the past)  do not make payments while in forbearance, it will be a waste of money.  Take the forbearance for a month and start repaying again when your IBR recert goes through.  You will only lose a month on your forgiveness plan.  the payments DO NOT have to be consecutive.

I think it is a complete myth that re-certifcation is a lengthy process for servicers. The likely scenario is that their IT systems default to not processing things to allow for uninterrupted payments. Instead, they skip the upcoming month (whether in forbearance, not asking for payment, or reverting to standard) and have IBR payments resume the month after.When performing annual IBR re-certification with one of my loan servicers (MOHELA), I submitted the info in a timely manner but their website then showed my next IBR payment pushed out by an extra month, with a month of no payments in between. Concerned that this would force me to miss an eligible payment for 10 year PSLF (I haven’t moved it to FedLoan yet), I called and complained and was told that although they had processed my re-certification form, their IT system automatically pushes the payment out to the next monthly cycle. I eventually found an ombudsman-esque report form on their website for reporting issues and sent it in to MOHELA, describing my problem. A member of that team eventually fixed the issue and allowed me to not skip a month of IBR payments when transitioning to my new annual IBR amount.

My points in all of this are that 1) it doesn’t actually take that much time for servicers to “process” an IBR re-certification, 2) they should be able to immediately update one’s payments to the new IBR amount once the re-certification has been processed, 3) interest should not be capitalized during this time nor should the payment revert to a standard payment because the individual is not going off of IBR and has submitted paperwork in a timely manner, 4) for those attempting PSLF, they shouldn’t be forced to miss out on a month each year (that’s 10 extra months added to the 10 years!), and 5) keep attempting to contact the lender and perhaps determine if they have investigative-ombudsman-esque people to look at your issue, or contact the Dept of Education ombudsman.

When I electronically re-certified IBR at one point, Sallie Mae (I have a separate federal loan with them) had the new IBR amount posted online for me within a week of submission.

again, your 120 payments on PSLF DO NOT have to be consecutive.

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I agree with @einmusiker. You are eligible to apply for PSLF after 120 qualified payments. There is no requirement that the payments be made consecutively.

However, you cannot make a qualifying payment in a month where you are not obligated to make a payment. Therefore, any payments made during forbearance do not qualify towards the 120 qualified payments.

-Biglaw Investor
http://www.biglawinvestor.com/

If you have any accrued interest it will capitalize when you “miss” the deadline and are forced to pay the larger monthly amount under the Standard 10-year repayment. Basically they are unenrolling you in IBR for a billing cycle and then re-enrolling you which causes accrued interest to capitalize. In my opinion this is the incentive for servicers to delay processing.