Hello, I have been making loan payments under the IBR plan for 4 to 5 years. I have also been in a qualifying public service job for that entire time. My AGI increased and my loan payments under IBR have increased dramatically to more that twice what I was paying before. My first payment under the new payment plan is due next month. I am concerned that I won’t be able to keep up with these new payments in the long run, in part because I also have private student loan payments that can’t be consolidated under Fed Direct Loans and for which I’m making standard payments.

I used the Income-Driven repayment calculator and saw that my monthly payments would be greatly reduced under the PAYE plan. I am interested in switching from the IBR to the PAYE to benefit from this monthly payment reduction. I would like to know if this is a good idea, or if I should just stick with the IBR and try to keep up with the payments.

- Will switching from IBR to PAYE have a negative impact on my ability to qualify for a PSLF?

- If I graduated from school in 2010, am I even eligible for the PAYE?

- Why doesn’t IBR take into account the fact that I also have private student loan payments?

I’d appreciate some advice on how I should move forward under these circumstances.

Thanks.

Eavc8q - 19 March 2015 01:38 PM

I used the Income-Driven repayment calculator and saw that my monthly payments would be greatly reduced under the PAYE plan. I am interested in switching from the IBR to the PAYE to benefit from this monthly payment reduction. I would like to know if this is a good idea, or if I should just stick with the IBR and try to keep up with the payments.

- Will switching from IBR to PAYE have a negative impact on my ability to qualify for a PSLF?

- If I graduated from school in 2010, am I even eligible for the PAYE?

Unfortunately, it looks unlikely that you would qualify for PAYE (I’m in the same boat).

http://askheatherjarvis.com/blog/pay-as-you-earn-hotter-than-IBR

Only “new borrowers” are eligible to choose Pay As You Earn
You are not eligible to choose PAYE unless you are a “new borrower”.

1.  didn’t owe any money on any federal student loan as of Oct. 1, 2007, and
2.  received a disbursement of a Direct Loan on or after Oct. 1, 2011.

jfs789 - 20 March 2015 11:12 AM

Eavc8q - 19 March 2015 01:38 PM

I used the Income-Driven repayment calculator and saw that my monthly payments would be greatly reduced under the PAYE plan. I am interested in switching from the IBR to the PAYE to benefit from this monthly payment reduction. I would like to know if this is a good idea, or if I should just stick with the IBR and try to keep up with the payments.

- Will switching from IBR to PAYE have a negative impact on my ability to qualify for a PSLF?

- If I graduated from school in 2010, am I even eligible for the PAYE?

Unfortunately, it looks unlikely that you would qualify for PAYE (I’m in the same boat).

http://askheatherjarvis.com/blog/pay-as-you-earn-hotter-than-IBR

Only “new borrowers” are eligible to choose Pay As You Earn
You are not eligible to choose PAYE unless you are a “new borrower”.

You are a new borrower if and only if you:

1.  didn’t owe any money on any federal student loan as of Oct. 1, 2007, and
2.  received a disbursement of a Direct Loan on or after Oct. 1, 2011.

Thanks for this response. I have a follow up question. Would I qualify under PAYE if I did a Direct Loan Consolidation on or after October 1, 2011? When I graduated from school I had Grad Plus loans and a Direct Loan. In 2012 I consolidated the Grad Plus loans into the Direct Loan program. Do you know if this qualifies as a disbursement? My gut tells me no, but I’m asking anyway.

Thanks.