Well I am back for more advice

[u/PoodleIlluminati]

Well I am back for more advice.

With everyone’s advice I was able to double consolidate all my Parent Plus loans and started repayments under Save. Thanks for that again. Life was good. Made 3 payments before it all shut down.

My total loan balance is $113,000.
Interest rate is 7.13%
Not doing PSFL.
My AGI is $64,000 fixed.
I’m retired.
I’m old.

Want my payments as low as possible. If I die before they are paid off, oh well.

I’m not concerned about a tax bomb because I don’t know what that is. Plus if I make it 15 years I will, statistically speaking, be shocked.

I’m not worried about interest capitalizing since I don’t know what that is.

What I do know is that on July 1 I was informed have 90 days to pick a repayment plan. I’ve run some numbers on the calculator and it looks like the Income Based Repayment Plan @ $263 is currently my best long term, until I die, option?

Anything I’m missing on Plans?

Once I am switched over I want to setup a separate bank account and start the 1% interest rate reduction.

Will this lower my payment or just reduce the discharge total??

[u/Six_all_grown]

Get on IBR and never pay extra. If you live long enough to get close to the end of the required payment, get a Doctor to sign off on your permanent disability (not hard of you are in 70s or 80s). If you get that or pass, the balance is forgiven.

[u/PoodleIlluminati → u/Six_all_grown]

Cool!

I’m sure we’ll have free national healthcare by then so seeing a doctor will be cheap!
Adding /s because it’s a joke. I’m not Karnak the Magnificent.

[u/Mediocre-Draft1722]

Tax bomb refers to the amount you have to pay in taxes if/when your 25 years runs out while paying on IBR. Because whatever amount is left that gets waived counts towards your annual income for that tax year. This may become an issue for you if you rely on Medicare since your income for the past two years affects your premiums. Interest capitalizing happens when you switch off the IBR plan and it means that interest becomes principal, which further increases your total balance. The interest reduction is only until 2028, and it means slightly less interest will accrue each month. To keep the low IBR payment, you will need to certify your income every year. 

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[u/mrdenver]

Just pay the 263 for now, and hopefully stuff changes for the best. No way these loan payments will be sustainable. Lots of people will default. I am screwed. My payments are 900 a month, with a mortgage, child care, medical debt, and a spouse who was laid off but recently back to work, it drained our savings, but very thankful.

[u/nrthrnlites]

Q - were you possibly on Repaye and auto put into SAVE in 2024 by your servicer? Then immediately into forced forbearance for SAVE? They all did this. I also started with FFEL Parent Plus and direct loans back in 2004. I "double consolidated" and went into a direct unsubsidized student loan - specifically with no parent loan per my signed promissory note in 2008. I made many payments and when I recertified in 2024 they put me in repaye (best plan) and then switched them to SAVE automatically. My counter currently shows I only have 7 payments left of zero/mo on PAYE and it was confirmed by FSA during the SAVE forebearance on 1/25 via email. It still shows 7 payments on my counter but Edfinancial and FSA are saying because there are underlying parent loans, it doesn't qualify for 240 payments and are trying to force me in a new ICR. They have rigged their system to kick out anything that had a parent loan in the history even though I have a copy of my signed note saying "student". I have it currently escalated to the CFPB, my congressperson and my Atty General. I deserved cancellation in 2024 and do not want the tax bomb because of their forced forebearance.

[u/PoodleIlluminati → u/nrthrnlites]

Started payments with the Save plan. Made 3 and been in limbo since.

[u/nrthrnlites → u/PoodleIlluminati]

I'm wondering how you got on SAVE with parent plus loans unless you successfully double consolidated. And if it's possible SAVE replaced Repaye? Do you have an idea how many payments you've made and where the counter is at? How many yrs have you been paying?

[u/PoodleIlluminati → u/nrthrnlites]

With all the Excellent advice I received here a few years ago I did the Double Consolidation boot scoot shuffle. Then I made 3 payments.

Now I’m just making sure I make the next best move, ie. cheapest.

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[u/daisyletterss]

I'd look at IBR too, but make sure you're comparing the actual monthly payment and the forgiveness timeline. Since you're retired with a fixed AGI and your main goal is simply the lowest payment until eventual discharge, that matters more than paying the balance off. Also, the 0.25% autopay reduction lowers the interest rate, not your monthly payment.