3) Will existing borrowers on legacy (pre-7/1/2015) IBR, ICR, and PAYE payment plans who choose to stay on those plans and NOT convert to the new (post-7/1/2015) PAYE plan face the $57,500 cap on PSLF?

According to the 2015 Budget Proposal (page S-13) [PDF], borrowers that have loans disbursed prior to July 1, 2015 will have the old PAYE terms for new loans disbursed after July 1, 2015 as well.  Here is the actual text:

  Students who borrowed their first loans prior to July 1, 2015, would continue to be able to select among the     existing repayment plans (for plans for which they now qualify and for loans originated through their current course of study), in addition to the modified PAYE.

So, if a freshman gets student loans for the 2014-15 academic year, they will have the option of getting the current PAYE terms and conditions for ALL loans during his or her “course of study”, even loans after July 1, 2015.  It is unclear what “course of study” means, but it presumably includes all loans to finish a program (undergrad or graduate).  It may also mean additional programs. For example a 2014-15 freshman may be able to get current PAYE terms for loans disbursed way after 2015 for graduate school.  Also “course of study” probably means just one program (currently enrolled in undergrad or grad school) but it could potentially include graduate school later.”

I am currently an undergraduate student that is about to finish up my undergraduate degree as soon as this summer semester, and the aforementioned statement is extremely vital to my upcoming graduate career. I completed a Master Promissory Note for the 2009-2010 school year that is valid. Now, is that same MPN valid and will it be waived when I enter graduate school? -OR- Will I have a new Master Promissory Note with new conditions if decide to enter graduate school and sign the MPN after July 1, 2015…the date when the new PAYE plan is in effect with its $57,500 forgiveness cap?

This is significant for my future because IF I enter graduate school under the new PAYE terms (after July 1, 2015), then I will be restricted to a $57,500 cap. Thus, this would REALLY incentivize me to enter graduate school this upcoming summer semester in order to take advantage of PSLF with the current MPN that includes the OLD PAYE terms and without the $57,500 forgiveness cap. Any advice is appreciated.

Just going off what you just said, I would say it seems fair to assume it would be better for you to start before the new plan goes to into action to avoid that cap.

RSullivan: you are asking the right questions, but there is almost nothing to be gained by trying to answer them by referring to the text of the proposal.  It’s just a proposal.  Read more about my thoughts on that here: http://askheatherjarvis.com/blog/administration-suggests-changes-to-paye-and-pslf-in-budget-proposal