Switching from REPAYE TO PAYE

[iggles]

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Lets assume I'm switching from REPAYE to PAYE after X amount of years. Is the total amount of all those interest subsidies I have been taking advantage of going to be tacked back onto my loan balance or does the non-subsidized interest rates just start accruing from the point that I switch?

Basically my question is what is stopping me from staying in REPAYE for 19.9 years and switching to PAYE right before the 20 year mark to get my graduate school loans forgiven 5 years early while still benefiting from a smaller "tax bomb" due to less negative amortization from REPAYE?

 

[babybull]

Lets assume I'm switching from REPAYE to PAYE after X amount of years. Is the total amount of all those interest subsidies I have been taking advantage of going to be tacked back onto my loan balance or does the non-subsidized interest rates just start accruing from the point that I switch?

Basically my question is what is stopping me from staying in REPAYE for 19.9 years and switching to PAYE right before the 20 year mark to get my graduate school loans forgiven 5 years early while still benefiting from a smaller "tax bomb" due to less negative amortization from REPAYE?

do you even qualify for paye? i think all your fed loans must have been disbursed before october 2007 in order for you to qualify for paye

 

[rxdawg21]

do you even qualify for paye? i think all your fed loans must have been disbursed before october 2007 in order for you to qualify for paye

Well after a 1 minute google search here are the qualifications.

First federal loan AFTER 10/1/2007. Last loan has to be AFTER 10/1/2011

so pretty much have to start taking out loans after10/1/2007 and you have to continue taking out loans until 10/1/2011 to qualify. So small group of people.

 

[Son_Goku]

Well after a 1 minute google search here are the qualifications.

First federal loan AFTER 10/1/2007. Last loan has to be AFTER 10/1/2011

so pretty much have to start taking out loans after10/1/2007 and you have to continue taking out loans until 10/1/2011 to qualify. So small group of people.

I qualify for that.

So how do you qualify for loan forgiveness?

 

[iggles]

Well after a 1 minute google search here are the qualifications.

First federal loan AFTER 10/1/2007. Last loan has to be AFTER 10/1/2011

so pretty much have to start taking out loans after10/1/2007 and you have to continue taking out loans until 10/1/2011 to qualify. So small group of people.

This is incorrect. If you went to school any time past 2007 you qualify for both PAYE and REPAYE (assuming you meet the income requirements)

 

[rxdawg21]

This is incorrect. If you went to school any time past 2007 you qualify for both PAYE and REPAYE (assuming you meet the income requirements)

Do you google?

Income-Driven Plans

In addition to meeting the requirement described above, to qualify for the PAYE Plan you must also be a new borrower as of Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011. You're a new borrower if you had no outstanding balance on a Direct Loan or FFEL Program loan when you received a Direct Loan or FFEL Program loan on or after Oct. 1, 2007.


Clearly states you must have received a disbursement of a loan (IE payout of the loan) after 10/1/2011....It is the best repayment plan and the most limited one for a reason.

 

[rxdawg21]

I qualify for that.

So how do you qualify for loan forgiveness?

Work for the govt or a 501c3 for 10 years, the smart recertify eligibility each year and keep a record. If you don't work for either of those its after 20 years and you will have tax bomb. You can change the plan you are in online through your loan servicer. Please read instructions from studentaid.ed.gov site for more specifics.

 

[iggles]

Do you google?

Income-Driven Plans

In addition to meeting the requirement described above, to qualify for the PAYE Plan you must also be a new borrower as of Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011. You're a new borrower if you had no outstanding balance on a Direct Loan or FFEL Program loan when you received a Direct Loan or FFEL Program loan on or after Oct. 1, 2007.


Clearly states you must have received a disbursement of a loan (IE payout of the loan) after 10/1/2011....It is the best repayment plan and the most limited one for a reason.

Sorry I didn't give it much thought since I know I qualify for both but you're right its pretty limited unless you're a newer grad. I started undergrad in 2009 (while taking out fed loans) and graduated pharmacy school in 2017 (also only fed loans).

 

[Amphetamine Salts]

i graduated highschool in june 2012, started taking out loans for pharm school fall 2012 and graduate may 2018, am i eligible for PAYE? which is better: PAYE or refinance for lowest interest rate and pay off the normal way, assuming in each scenario i have 150k in loans. my goals are to pay the least amount overall while still having a little over 2k a month in cash to live off of/have fun with