Does all interest capitalize when switching between different repayment plans?

I have 200K in principle at 7 percent and 50K in interest.  Obviously in an effort to avoid the hugest tax bill imaginable in 20 years, I would like to keep those two numbers separate for as long as possible and avoid capitalization.  Still the pull of 10% instead of 15% is a strong one.

If this next year I quit IBR and go straight into REPAYE will I start with 250K in principle (more or less) due to automatic capitalization, even though i did not go into forbearance, deferment, or lose my financial hardship?

Switching repayment plans is a trigger for interest capitalization, yes.  But we don’t have the final rules governing REPAYE yet.  Should be late Oct 2015 or early Nov when they are finalized.

Heather: can you determine how the switch is going to work into REPAYE now that the rules have been finalized? I have not found the answer in the final rules yet, but i haven’t made it all the way through the 200+ pages they released yesterday.

Just wanted to see if there were any updates regarding REPAYE vs IBR.

Currently I am IBR and have 3 years of certified payments in, from my reading, it appears that by switching to REPAYE from IBR I risk falling under the PSLF cap of $57k. Currently, I believe I am grandfathered into full forgiveness of my loans as in the terms of my MPN. Questions then are?

1) Is this correct? Would I fall under the new PSLF cap?

and

2) Does the cap get applied to me even if I stay on IBR? Am I truly grandfathered in?

Friggy31, I don’t think there is a cap. It was proposed, but never happened.