For grad school FFEL loans, it seems like they're forgiven after 25 years. But if you consolidate with the hope that they are forgiven in 4 years, could that change if Biden isn't reelected?
In theory yes, but I don't expect that a republican president would change the IDR system in that way. It's not like a blanket forgiveness, Biden just changed the way the IDR program works and improved it to where it was theoretically supposed to be.
You only have until April 30th to consolidate the FFEL loans and get credit for payments on them as FFEL loans though, so I would do this asap.
(the long story - FFEL loans are loans made by private bank institutions and not the government - the IDR adjustment is allowing all payments made to those private banking institutions to count as though they were made to the government. This is giant and huge and a once in a lifetime situation. I believe after April 30th it'll never be an option again.)
gretchenindisguise, I spent some time today reading everything before attempting to move my loans over to FFEL.
When I go through the motions on the FFEL site, it appears I won't qualify for an IDR plan from today and onwards. A combination of not enough loans remaining and a high enough household income appears to make me ineligible. So it seems like even if I get the "credit" for around 19 or 20 years of repayment, because I won't be able to switch to IDR for the last 5 then I wouldn't end up eligible for forgiveness? (I would have to be on the "pay for 25 years and then be forgiven" track because some of my loans are from dental school.)
I'm nervous to switch to FFEL because it seems like I'd lose the 1% discount in the interest rate I have with my current loan servicer from way back when. I also read something that I may be able to keep this discount even if I move to FFEL? And I read would have a chance to reject consolidating over to FFEL before it's final because the consolidation doesn't happen immediately when I hit "ok" on April 30th. So maybe more guidance will come out and I can back out of moving to FFEL if it seems like I won't qualify for forgiveness and I'd lose my 1% discount.
gretchenindisguise, I spent some time today reading everything before attempting to move my loans over to FFEL.
When I go through the motions on the FFEL site, it appears I won't qualify for an IDR plan from today and onwards. A combination of not enough loans remaining and a high enough household income appears to make me ineligible. So it seems like even if I get the "credit" for around 19 or 20 years of repayment, because I won't be able to switch to IDR for the last 5 then I wouldn't end up eligible for forgiveness? (I would have to be on the "pay for 25 years and then be forgiven" track because some of my loans are from dental school.)
I'm nervous to switch to FFEL because it seems like I'd lose the 1% discount in the interest rate I have with my current loan servicer from way back when. I also read something that I may be able to keep this discount even if I move to FFEL? And I read would have a chance to reject consolidating over to FFEL before it's final because the consolidation doesn't happen immediately when I hit "ok" on April 30th. So maybe more guidance will come out and I can back out of moving to FFEL if it seems like I won't qualify for forgiveness and I'd lose my 1% discount.
I'd appreciate any insight you have.
You'd be consolidating FFEL loans to Direct Loans.
All of your past payment history would count under the IDR adjustment whether you were on an IDR or not. Going forward you are correct, that for payments to count you'd need to be on an IDR. Everyone is eligible for SAVE, but if your income is high then your payment may be really high. If you have a high student loan balance still, then these high payments until forgiveness may still be less than paying it off yourself. If you go the forgiveness route then interest rates don't really matter because it's all forgiven.
Your interest rate would be the weighted average of your current rates. I'm not sure how they would carry over the discount, I think you're right that you would lose it. I think some servicers do a .25% discount for auto payments, but I'm not 100% sure.
gretchenindisguise, thank you for responding! I did some more digging and found some threads on Reddit last night of people in similar situations. I've decided to not pursue it and will finish paying my loan out on the 30 year term I got when I consolidated after graduation.
Post by kittywalker on Apr 30, 2024 12:44:54 GMT -5
Another question on this for anyone who might know the answer: If you consolidate a FFELP grad school loan to direct with Student Aid, would it change over to an income driven repayment plan rather than being based on the loan principal/term/interest rate only?
Thanks to all of the knowledgeable people on this, it's such a confusing topic for many of us!
Another question on this for anyone who might know the answer: If you consolidate a FFELP grad school loan to direct with Student Aid, would it change over to an income driven repayment plan rather than being based on the loan principal/term/interest rate only?
Thanks to all of the knowledgeable people on this, it's such a confusing topic for many of us!
Your repayment plan is something you need to choose and is a separate (but often simultaneous) process. So you choose to consolidate and then choose your repayment plan - the standard consolidation graduate repayment plan is based on loan principal/interest/length of repayment (often 30 years).
Then you have income drive repayment plans - that you can apply for that are based solely on your income. The ones currently available are SAVE, Income Based Repayment (IBR), PAYE (pay as you earn) and Income Contingent Repayment (ICR). For most folks SAVE is the best bet, but it's dependent on your income. If you're a high income earner, than the income driven repayment plan may be higher than the graduated repayment plan, but comes with the benefit of forgiveness after 25 years for graduate loans (or 20 years for undergrad).
I got the email, too, but I can't figure out which category my loans fall into. I'm afraid to get too excited. ðŸ˜
Have you heard anything more? I got an email Saturday morning from Aidvantage saying that my loans are forgiven. There is a $0 balance showing. I expected it to take a lot longer. The initial email said several months, but this was ~3 weeks.
I got the email, too, but I can't figure out which category my loans fall into. I'm afraid to get too excited. ðŸ˜
Have you heard anything more? I got an email Saturday morning from Aidvantage saying that my loans are forgiven. There is a $0 balance showing. I expected it to take a lot longer. The initial email said several months, but this was ~3 weeks.
SAME. I'm flabbergasted, TBH. I still have no idea why I qualified for forgiveness, but I'm very grateful!
I am always so delighted when I hear someone has their loans forgiven.
Same!
I paid off my loans in full early, so it seems others think I should be mad about this. But I’m not. I’m thrilled for people who can have that weight lifted off of their shoulders. We ALL win when the student loan situation is fixed! I wish more people understood why this is being done…but no one will listen anyway.
Have you heard anything more? I got an email Saturday morning from Aidvantage saying that my loans are forgiven. There is a $0 balance showing. I expected it to take a lot longer. The initial email said several months, but this was ~3 weeks.
SAME. I'm flabbergasted, TBH. I still have no idea why I qualified for forgiveness, but I'm very grateful!
It took me until my late 40s to pay off my student debt loans (undergrad and graduate degrees plus not working for times) - I'm THRILLED to hear that people aren't going to be in debt as long as I was.
It took me until my late 40s to pay off my student debt loans (undergrad and graduate degrees plus not working for times) - I'm THRILLED to hear that people aren't going to be in debt as long as I was.
Thank you for this, and others who have shared in our joy. I knew I could post on GBCN because student loan forgiveness is something often talked about here, but besides my parents I have not shared it with any of my American friends or family. I have heard too many generalized negative comments to know that they would not be excited for me. My parents were quick to point out that these same people were happy to receive "tax payer dollars" in the form of Covid stimulus cheques and other benefits, just unhappy when it doesn't benefit them directly.
I've been on the other side too. We paid off H's Canadian student loans early and later could have received some assistance with a few thousand dollars. There was never a moment where I wasn't overjoyed for the people getting financial support and also happy that H and I were in a position to pay his loans off early.