CARES Act payment suspension for PSLF

[Monsterdaddy]

There is good news for borrowers doing PSLF. The CARES Act has a special provision that as long as you meet all other criteria for PSLF, you may suspend your next six payments (April to September) and have all suspended payments count towards the 120 payments needed toward loan forgiveness.

https://www.congress.gov/116/bills/hr748/BILLS-116hr748eas.pdf

Relevant section:
"Section 3513 (c) CONSIDERATION OF PAYMENTS.—Notwithstanding any other provision of the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), the Secretary shall deem each month for which a loan payment was suspended under this section as if the borrower of the loan had made a payment for the purpose of any loan forgiveness program or loan rehabilitation program authorized under part D or B of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.; 1071 et seq.) for which the borrower would have otherwise qualified."

MyFedLoans has not updated their system for this yet. The CARES Act should overwrite the previous forbearance program which did not count towards PSLF. For now, if you want to skip the April payment MyFedLoans instructed me to apply for the old COVID-19 forbearance and it should be automatically be updated to the new program later. They also said if you make the April payment and then go with the payment suspension that MyFedLoans would refund it.

Stay safe and healthy everyone!

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[owlegrad]

This is the program so complicated no one even knows if they qualify or not, right? I am sure this will not complicate things at all.

 

[Monsterdaddy]

This is the program so complicated no one even knows if they qualify or not, right? I am sure this will not complicate things at all.

Yeah, I kept hammering the MyFedLoans rep about the forbearance upgrade thing because you know how bureaucratic they are. If I select the forbearance which doesn't count and they don't upgrade it.....

Gonna have to stay on top of MyFedLoans. Will keep you all updated.

 

[confettiflyer]

This is the program so complicated no one even knows if they qualify or not, right? I am sure this will not complicate things at all.

What’s so complicated? It’s easy if people read it.

From my understanding, this will be a blanket automatic stoppage of payments. If you want to pay, you’d have to “opt in.”

TBD though, FedLoan (and even SBA for the business side of the Act) are struggling to implement quickly. FedLoan said they were going to be late but retroactively applying benefits.

This saves me $9000 this year while retaining PSLF credit for those payments. Woot.


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[owlegrad]

What’s so complicated? It’s easy if people read it.

So easy that most of the people who have applied have been denied and people who thought they were going to get the benefit the whole time end up not getting it. I know you saw the articles about it, right?

 

[confettiflyer]

So easy that most of the people who have applied have been denied and people who thought they were going to get the benefit the whole time end up not getting it. I know you saw the articles about it, right?

It’s people not reading. Sorry, people working for 501(c)6 should know it’s not the same as a 501(c)3. It’s clear as day, so is Direct vs FFEL loans (though that was fixed with the temp PSLF program).

Right job, right loan, right payment.


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[owlegrad]

It’s people not reading. Sorry, people working for 501(c)6 should know it’s not the same as a 501(c)3. It’s clear as day, so is Direct vs FFEL loans (though that was fixed with the temp PSLF program).

Right job, right loan, right payment.


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For your sake I hope you are right. It’s hard for me to believe that something that simple can have so many people who think they qualify and then don’t.

 

[VictorOfHungerGames]

This is the program so complicated no one even knows if they qualify or not, right? I am sure this will not complicate things at all.

I called. The first thing girl on the phone said was, "you qualify for emergency forbearance!". I felt like I won the lottery... lol

 

[Rockinacoustic]

This saves me $9000 this year while retaining PSLF credit for those payments. Woot.

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That bay area pay is something else if 10% of your discretionary income is $18k...

 

[confettiflyer]

I called. The first thing girl on the phone said was, "you qualify for emergency forbearance!". I felt like I won the lottery... lol

That’s different from the CARES Act forbearance, be careful.


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[PharmDBro2017]

I called. The first thing girl on the phone said was, "you qualify for emergency forbearance!". I felt like I won the lottery... lol

Typically interest capitalizes at the end of that forbearance; is that the case here?

 

[lord999]

It’s people not reading. Sorry, people working for 501(c)6 should know it’s not the same as a 501(c)3. It’s clear as day, so is Direct vs FFEL loans (though that was fixed with the temp PSLF program).

Right job, right loan, right payment.


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Good luck with that. We've had the DoE deny literal employees of HHS, VA, and DoS (internal civil service and career employees) illegally. It's a lot more work than it seems.

 

[confettiflyer]

Good luck with that. We've had the DoE deny literal employees of HHS, VA, and DoS (internal civil service and career employees) illegally. It's a lot more work than it seems.

As you said illegal, it’ll be a slog but ultimately the law is clear.


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[Gombrich12]

For the past 5 years I've been saying people who are paying their loans off are suckers. I paid mine off long ago before all these goodies were available, but if I was coming out today I would be on PAYE/PSLF for sure.

 

[BMBiology]

For the past 5 years I've been saying people who are paying their loans off are suckers. I paid mine off long ago before all these goodies were available, but if I was coming out today I would be on PAYE/PSLF for sure.

This guy is going to make $300 k in tax free profit for RE sell.

Why did I bring this up? Because you need to have a low debt to income ratio if you want to be a RE investor....can’t do it if you have a boatload of student loans

 

[VictorOfHungerGames]

That’s different from the CARES Act forbearance, be careful.


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I checked. Its the same.

 

[VictorOfHungerGames]

Typically interest capitalizes at the end of that forbearance; is that the case here?

Not entirely sure about that but considering youre paying 10% of your income for 20 years, how much interest you accrue wont matter much?

 

[confettiflyer]

This guy is going to make $300 k in tax free profit for RE sell.

View attachment 300384

Why did I bring this up? Because you need to have a low debt to income ratio if you want to be a RE investor....can’t do it if you have a boatload of student loans

RE investors don’t really use mortgages....actually the amateur ones do.


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[confettiflyer]

I checked. Its the same.

The forbearance granted by executive order predates the CARES Act forbearance and was limited to 60 days. No servicer as of this morning has implemented CARES forbearance, and the prevailing thought is that it will be universally applied with no intervention required.

If you called today and spoke to someone, and they offered you emergency forbearance, it’s pursuant to the executive order and not CARES. Technically it’s an “administrative forbearance” that is granted.

There are no PSLF credits under the EO, only under CARES.


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[BMBiology]

RE investors don’t really use mortgages....actually the amateur ones do.


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Even Mark Zuckerberg has a mortgage!

 

[confettiflyer]

Even Mark Zuckerberg has a mortgage!

He’s not an RE investor, he’s a schmuck in a hoodie


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[BMBiology]

He’s not an RE investor, he’s a schmuck in a hoodie


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a schmuck with 10 properties: Mark Zuckerberg spent almost $60 million on 2 waterfront estates in Tahoe last winter. Here's a look at the 10 properties he owns across the US, from a modest Palo Alto home to a Hawaiian plantation.

 

[VictorOfHungerGames]

The forbearance granted by executive order predates the CARES Act forbearance and was limited to 60 days. No servicer as of this morning has implemented CARES forbearance, and the prevailing thought is that it will be universally applied with no intervention required.

If you called today and spoke to someone, and they offered you emergency forbearance, it’s pursuant to the executive order and not CARES. Technically it’s an “administrative forbearance” that is granted.

There are no PSLF credits under the EO, only under CARES.


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I was told the first payment would in September or October. No idea what this 60 day limit is. My servicer called it an emergency forbearance. Maybe she was referring to CARES? No payment for 6 months due to corona. This forbearance would not extend the 20 year plan. Basically they're wiping out 6 months of payment? She did say this forbearance would've been applied without a request but processed faster if I request it since I was already on the phone with her.

All I care about at this point is I don't gotta pay for 6 months and that money is going straight into my index fund investments lol

 

[Monsterdaddy]

The reason confettiflyer and I are concerned is administratively there are two different forbearances and if MyFedLoans doesn't code it correctly then it's possible they won't be counted towards PSLF. The situation is evolving and hopefully MyFedLoans will get it right. But history shows they can and will screw things up. Personally, I've been waiting THREE YEARS for them to resolve some payments but they keep saying they will get to it...

My advice is to stay on top of it for the next few weeks.

 

[confettiflyer]

a schmuck with 10 properties: Mark Zuckerberg spent almost $60 million on 2 waterfront estates in Tahoe last winter. Here's a look at the 10 properties he owns across the US, from a modest Palo Alto home to a Hawaiian plantation.

lol Zuck fanboi, eh?

I'd say something else instead of fan in fanboi but i'd probably get banned

 

[confettiflyer]

I was told the first payment would in September or October. No idea what this 60 day limit is. My servicer called it an emergency forbearance. Maybe she was referring to CARES? No payment for 6 months due to corona. This forbearance would not extend the 20 year plan. Basically they're wiping out 6 months of payment? She did say this forbearance would've been applied without a request but processed faster if I request it since I was already on the phone with her.

All I care about at this point is I don't gotta pay for 6 months and that money is going straight into my index fund investments lol

Lol that's fine, that sounds confusing because emergency forbearance is very specific to an administrative forbearance, but it sounds like this person was describing the CARES Act forbearance.

Totes confusing. Keep on top of it, as noted in the post above.

 

[confettiflyer]

The reason confettiflyer and I are concerned is administratively there are two different forbearances and if MyFedLoans doesn't code it correctly then it's possible they won't be counted towards PSLF. The situation is evolving and hopefully MyFedLoans will get it right. But history shows they can and will screw things up. Personally, I've been waiting THREE YEARS for them to resolve some payments but they keep saying they will get to it...

My advice is to stay on top of it for the next few weeks.

The absolute worst case scenario is that the 60 day administrative forbearance is applied and then you roll into the remainder of the 6 month CARES forbearance, so you'd get credit for only 4 PSLF payments and not 6. If you're not on PSLF, it's a non-issue as in both cases, interest doesn't accrue and the ultimate result is no payment until October 2020.

 

[FlavyFlav]

Just checked my processor, it says we are automatically enrolled once we get to 30 days of nonpayment, or we can e-mail/call now to immediately be put on the 6 month forbearance. This is Nelnet, btw. Since I'm on REPAYE, I see no reason not to take this as it doesn't affect the time to loan forgiveness and interest won't accrue.

 

[gwarm01]

Just checked my processor, it says we are automatically enrolled once we get to 30 days of nonpayment, or we can e-mail/call now to immediately be put on the 6 month forbearance. This is Nelnet, btw. Since I'm on REPAYE, I see no reason not to take this as it doesn't affect the time to loan forgiveness and interest won't accrue.

Interesting. My wife's grad school loans are through Nelnet. I thought about taking the six month forbearance and setting that money aside, but we are about five months from just paying it off so I'd rather be done with it.

 

[FlavyFlav]

Interesting. My wife's grad school loans are through Nelnet. I thought about taking the six month forbearance and setting that money aside, but we are about five months from just paying it off so I'd rather be done with it.

Definitely sounds like the right course for you, grats on paying it off!

 

[Rockinacoustic]

Just checked my account and my monthly payment was automatically changed to $0, but my direct debit still shows the usual payment scheduled for this month. Anyone else have the same account snapshot?

 

[gwarm01]

Just checked my account and my monthly payment was automatically changed to $0, but my direct debit still shows the usual payment scheduled for this month. Anyone else have the same account snapshot?

Interesting. My account with FedLoan has cancelled my auto-pay, but still shows the amount due this month. Guess I'll let it ride for a bit.

 

[MelaNix12]

So according to studentaid.gov "any payment you made during the administrative forbearance period (March 13, 2020, through Sept. 30, 2020) can be refunded. Contact your loan servicer to request that your payment be refunded." So does this mean if you pay your loans on the 22nd of every month (lets say) that you will get 7 months of 0% interest and no payment counted towards your IBR and PSLF instead of 6 months? Did I figure that right? Lucky for those people..

 

[PharmDizzle]

Interesting. My account with FedLoan has cancelled my auto-pay, but still shows the amount due this month. Guess I'll let it ride for a bit.

Mine did something similar, but when I went into my auto payment and acted like I was going to adjust it the suspend button was grayed out and it then said some warning about how I recently suspended a payment. But definitely still says my payment is due 4/5. I’m pretty stoked about finally qualifying for something. 6 months of not paying my loans still counting toward my PSLF is seriously so much better than a $1200 check!

 

[Rockinacoustic]

Just got the letter from Fedloans about administrative forbearance. Their website also has been updated to state these payments count towards PSLF for those on a qualifying payment plan already.

MyFedLoan - COVID-19

 

[babybull]

So according to studentaid.gov "any payment you made during the administrative forbearance period (March 13, 2020, through Sept. 30, 2020) can be refunded. Contact your loan servicer to request that your payment be refunded." So does this mean if you pay your loans on the 22nd of every month (lets say) that you will get 7 months of 0% interest and no payment counted towards your IBR and PSLF instead of 6 months? Did I figure that right? Lucky for those people..

this is true. i just called greatlakes and they're going to refund $800 for my march payment. this stimulus plan will save me $5,000 this year. all of a sudden not qualifying for the $1200 stimulus check dudn't feel so bad

this is good though. more money in the hands of millenials will help save the economy as we are big consumers unfazed by this Boomer Remover virus.

 

[BMBiology]

this is true. i just called greatlakes and they're going to refund $800 for my march payment. this stimulus plan will save me $5,000 this year. all of a sudden not qualifying for the $1200 dudn't feel so bad

Damn, you don’t make much then as a pharmacist for a single, male with no kids.

 

[babybull]

Damn, you don’t make much then as a pharmacist for a single, male with no kids.

show me your math. calculate how much i make

 

[BMBiology]

show me your math. calculate how much i make

It is not rocket science

 

[confettiflyer]

show me your math. calculate how much i make

Lol back calculate.... monthly payment x 12 = AGI minus 150% above the FPL for a family size of 1. Solve for AGI.


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[babybull]

Lol back calculate.... monthly payment x 12 = AGI minus 150% above the FPL for a family size of 1. Solve for AGI.


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yup. i asked only because i wanted to see biology guy fumble his way thru the math in that equation. my kind of entertainment.

but it's another kind of desperation to would want to do that. fyi biology guy, my IBR is based off my 2018 income, the year i was hired for my first FT pharm job so that payment is based off an incomplete year. you need to try again.

 

[BMBiology]

yup. i asked only because i wanted to see biology guy fumble his way thru the math in that equation. my kind of entertainment.

but it's another kind of desperation to would want to do that. fyi biology guy, my IBR is based off my 2018 income, the year i was hired for my first pharm job so that payment is based off an incomplete year. you need to try again.

When are you going to stop lying? 2016 huh?

 

[babybull]

When are you going to stop lying? 2016 huh?

View attachment 300938

i'm getting interrogated. now i'm scared

the payment is based off 2018 info
i worked as a contractor for most of 2018. days off = no pay
IBR takes these unpaid vacation days into account in the monthly calculation amount
i got hired FT in late 2018
what a surprise

if you really want a glimpse of my gains you could've asked
i'll screenshot you my market performance during what has arguably been the most aggressive market sell-off in history

 

[Monsterdaddy]

So I have an update and good news for some folks. I called MyFedLoans twice and asked on whether a payment made for March but on or after March 13th can be refunded and still count for PSLF. Two representatives said yes so effectively you can have 7 payments suspended and count towards PSLF.