PhD/PsyD Income-based loan repayment question

[erg923]

Asking for a collegue: Is there a penalty or complication with paying more than your IBR established payment amount? I think she got a lump some of money (non-taxable?) and was going to pay more on her loans this year than what the IBR monthly payment amount is current set. Could it disqualify you from the program, perhaps? i think thats what has her worried.

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[AcronymAllergy]

I want to say you can, although I believe you need to include a written request to have the extra money applied toward the principal rather than toward a future payment. But I'd encourage her to call her loan management co. directly and check with them, just to be safe.

No clue how the lump sum might affect her payments for the following year, though, since that's all based on tax return-related info.

 

[Therapist4Chnge]

No matter what the answer/course of action…make sure she gets it in writing. Sallie Mae is notorious for saying one thing and then having someone contradict it on the next call/contact.

 

[paramour]

My loans are under IBR, and this is one of the first questions I asked (my minimum payments are a joke). I've been repeatedly advised that I can pay more without penalty. I've also done this with previous ED loans, i.e., paid them off early and accrued no penalties.

As AA suggested, I suspect that it could potentially change repayment amounts for the following year since they take into consideration total overall loan payments vs. your income. If the overall loans she owes are considerably less, then it might increase her required payment.

There are calculators galore online if she wants to check what her estimated payment would be by entering the new overall loan amount (after her payments) vs. her income.

No matter what the answer/course of action…make sure she gets it in writing. Sallie Mae is notorious for saying one thing and then having someone contradict it on the next call/contact.

I frakkin' despise Sallie Mae. We had significant difficulties with them when they held the ex-spouse's loans. Unfortunately, they hold one of my loans now and it makes me more than a bit paranoid. I track all conversations and maintain all my records with them. I recently received notification that some of their loans may be sent to other companies. This is what caused mass f*ckedupedness with the ex-spouse's loans. So, if you have Sallie Mae, please, please, please keep an eye on your correspondence and account info and track your payments!

 

[Therapist4Chnge]

I too loathe SM, as they have screwed up countless times. It has taken weeks for them to refund bogus/multiple charges (often thousands of dollars because they charged 2x-3x or more what I actually owed). Their CS regularly provides conflicting information, and trying to get things in writing can be like pulling teeth. I actually need to call them now about updating some information on my account and I keep stalling because I get so irritated wasting 30+ min on the phone for something that should take <5 min.

 

[deleted106747]

My loans used to be on IBR, and I decided to pay off the interest in a lump sum because I was frustrated that my payments were not hitting the principle. It was a disaster. They misapplied the money repeatedly, changed my payment plan, instead of paying the loan, they stretched out the due date, then took 2 payments one month, all and all it was a mess. I would advise your colleague to get on a different plan if she wants to make a lump sum payment. It took me six months of hour long conversations with various people and at least 2 supervisors to get it straightened out. And yes I have Sallie Mae.

 

[CaliMac]

Sallie Mae's problems are not new. A friend of mine had the same complaints of that system 20 years ago.