Upon consolidating my formerly defaulted loans—- Sallie Mae—- with Direct Loan consolidation in March of 2013, I filled out the required IBR paperwork necessary to put me in the plan.  I am disabled and receive disability as my only source of income. For documentation I was required to send a copy of my social security benefit award letter and a self certification letter in lieu of W2 as I haven’t worked in three years or filed taxes.  My loan was then to be serviced by myfedloan.org My income is below the poverty line for one person and on April 3 2013,  I received correspondence from MyFedLoan that I was now enrolled in their IBR payment plan and would be subject to review on 5/17/14.  My payment would be 0$.  I was pleased as all seemed to go off without a snag.

Less than a week later, on April 11, 2013 I received a letter stating I was being reassigned to a leveled payment plan, with no explanation. 

I called myfedloan and was told that a disbursement of 20.85 was what triggered my removal from IBR and placement into Standard Repayment Plan.  I had never received any kind loan or disbursement especially one so small and upon questioning two different people at myfedloan, no one could explain what the disbursement was for or why it triggered a change in my repayment plan.  They put me on a temporary forbearance while my IBR was “Reviewed” by myfedloan again 10-15 days.  I was to call back on 4-29-13. 

Upon the document they sent me it stated there has been a change to your repayment terms
* a deferment or forebearance ended
*you requested a change to your repayment plan
*your due date has changed
*interest was capitalized on your loans
*your interest rates has changed
*your previous monthly payment was not suficient to pay off your loans within the time period.

So just eight days after receiving paperwork from myfedloan stating I was accepted into the IBR plan, for no apparent reason I was reassigned to Standard/level repayment plan.  I had not started working and since I am disabled I haven’t filed any tax forms. 

Now I am in limbo waiting to hear an answer to a question no one could answer on 4-11-13.  What exactly was the mysterious 20.85 disbursement (capitalized interest) and why did i change my repayment plan from IBR to standard?

Its just frustrating, and my disability includes severe anxiety and the the thought of a payment I can’t afford certain creates anxiety considering I just just these loans out of default in January.

The myfedloan customer representative assured me upon re-review of my loan I would be put back on IBR.

Has anyone else had this problem?  Or could their be other reasons?  Is it simply a glitch?  If they would not put me back on IBR should I contact the ombudsman’s office?