LRAP/IBR/PSLF. How does it work? Let's find out!

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Expand view Topic review: LRAP/IBR/PSLF. How does it work? Let's find out!

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Story » Thu Nov 25, 2021 7:53 pm

Fuck yes.

A few years ago, I once spoke with a person who used to work at DOE. We were pretty good friends, and I asked her why so many PSLF applications were denied. (This was when mainstream media finally started recognizing the problems with PSLF.) She told me that the DOE people who review PSLF applications literally see it as their job to find a way to deny—they would nitpick and find any supposed error as a reason to deny. These DOE people see a denial as serving the “best interest” of DOE because it saves the Dept money. This mentality was held by regular frontline DOE employees, regardless of the political beliefs.

Truly baffling and stupid. I would laugh if these results weren’t so dire.

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Nebby » Wed Nov 24, 2021 3:32 pm

This rules. Finally righting wrongs

https://www.cnn.com/2021/11/23/politics ... index.html

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Nebby » Wed Nov 24, 2021 3:31 pm

A friend just had their debt forgiven via PSLF 😊

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Buckeye Gus » Thu Nov 11, 2021 9:48 pm

Thank you both! I appreciate the information, this is some unexpected good news for once.

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Nony » Thu Nov 11, 2021 7:25 pm

Yup, the $0 payments count. If you were in forbearance and therefore not paying, it wouldn’t count, but a $0 payment based on your income is still a payment.

There is an option for recertifying based on pay stubs, but it’s really intended to address a drop in income, so that you need a lower payment. You’re only required to recertify once every 12 months, and they look at your annual income, not monthly. You’re good.

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Nebby » Thu Nov 11, 2021 5:04 pm

Also, since loans are administratively paused until Jan. 31 2022, your first due date won't actually be until February, but January will still count for PSLF purposes.

Welcome to the PSLF grind! I'm a month away from the halfway point 🤗

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Nebby » Thu Nov 11, 2021 5:01 pm

You do not need to recertify. It's completely acceptable and legal to use the previous year's income for certification purposes. I had zero $ payments my first year too. It's completely normal. It's not too good to be true - it's how the law is written.

Wait to recertify into your normal time next year (basically a year from now). Always use your past year's taxes to recertify (via the link with IRS option). That way your payments will always be based on your previous year's adjusted gross income as calculated in your taxes.

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Buckeye Gus » Thu Nov 11, 2021 4:57 pm

I had a question about my situation if anyone could chime in (I looked through the thread and couldn’t find a similar situation so I apologize if this had been discussed). I graduated in May 2021 and plan on remaining in my public interest job for the foreseeable future so I’m committed to the PSLF path. The problem is I just got approved for PAYE and it says my payments are $0 for 12 months starting January 1, 2022. My loans are with EdFinancial, and the Payment section on their website shows my first due date as 01/11/2023.

I’m making an actual salary now but the only way I can certify my income on the Student Loan site is by using my 2020 income tax info, and obviously I didn’t have much of an income since I was in school. My employer connected us with a student loan adviser and that person told me to submit proof of my current income through EdFinancial’s website in order to get my payments recalculated as she said that’s the only way to get my payments count towards PSLF, but I’ve seen a few Reddit threads saying the year of $0 does indeed count.

Paying $0 a month for a whole year and having it count sounds… too good to be true? I want to hit my 120 payments ASAP so does anyone know if that 12 months would count towards my total? Should I just wait to recertify in a year or do it now?

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Story » Sat Oct 16, 2021 11:45 pm

Does anyone know who is gonna replace Fedloan yet? IIRC, Fedloan is gonna stop servicing student loans.

Edit because I found this quote:

“FSA is in the process of transferring those loans to remaining servicers,” wrote the Department. Some FedLoan accounts are already being transferred to MOHELA, an existing Department loan servicer. However, the Department has not confirmed that all FedLoan accounts will be transferred to MOHELA, and many still remain with FedLoan for now.

https://www.forbes.com/sites/adamminsky ... owers/amp/

Can anyone share about personal experiences with MOHELA?

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Story » Sat Oct 16, 2021 11:44 pm

Congratulations, Nebby. That must feel good.

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Nebby » Sat Oct 16, 2021 5:13 pm

Submitted one more employer cert on my last day of previous job and just got the updated count. 58/120

Crazy to think I'm halfway done!

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Nebby » Thu Oct 07, 2021 8:34 am

PSLF changes are officially announced

https://www.ed.gov/news/press-releases/ ... m-overhaul

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Story » Fri Oct 01, 2021 7:38 pm

I admire your optimism!

Let’s hope for some more forgiveness of other loans, lower tuition, etc.

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Nebby » Fri Oct 01, 2021 4:08 pm

Maybe, but... I honestly don't see that happening. It's rectifying a pretty unfair situation so it would take a truly vindictive administration (worse than the last). Let's assume such an admin comes in, a final rule reversal wouldn't likely be final until 2026. By then, most people who benefit from this rule would already have their loans forgiven.

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Story » Fri Oct 01, 2021 4:04 pm

Nebby wrote:
Fri Oct 01, 2021 8:19 am
The details of this aren't official yet, but if these things go through, it'll be huge at remedying some of the biggest structural problems with the program due to the really bad communication of the policies in the early years of it.

These changes mean potentially hundreds of thousands of people will have their loans forgiven much sooner.
A future administration could undo this remedial rule and any of the rule’s benefits, right?

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Nebby » Fri Oct 01, 2021 8:19 am

The details of this aren't official yet, but if these things go through, it'll be huge at remedying some of the biggest structural problems with the program due to the really bad communication of the policies in the early years of it.

These changes mean potentially hundreds of thousands of people will have their loans forgiven much sooner.

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Nebby » Fri Oct 01, 2021 8:17 am

Pretty huge news from Ed: https://www.npr.org/2021/10/01/10418720 ... iveness-pr

They are going to change the rules of PSLF to allow more loan-types or repayment-types qualify. This will be HUGE for folks who, especially in the early years of the program (2010-2014) where there was terrible communication about what loan types qualified and what repayment plans qualified.

One big issue was the FFEL program, which was discontinued in 2010. It's where you apply for aid and qualify for loans, which are provided by a priviate financial institution (even though you obtained it the same way you obtained direct loans). There wasn't much different between the loans other htan the money was coming from a private institution instead of Treasury. These were NOT private student loans as we know them. So A LOT of people (including a few of my friends and colleagues) had those loans but had no idea that they were different than the normal student loans from Treasury until, years later, they submit a certification and are told that they do not qualify for PSLF. The only way to cure it was to consolidate your loans because Ed would automatically convert them to a Direct Loan.

Making these FFEL loans qualify for PSLF will be HUGE for so many people who lost years of progress towards PSLF. E.g., a friend of mine will qualify about 3 years earlier once this change comes through (they've been in qualifying employment since 2014 but didn't learn about that some of their old undergrad loans pre-2010 were FFEL loans until 2017 when they tried certifying for the first time).

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Nebby » Mon Aug 09, 2021 1:00 pm

Just found out that Department of Education releases quarterly PSLF reports to track program metrics: https://studentaid.gov/sites/default/fi ... il2021.xls

As of April 2021, 5500 people have had their loans discharged. Other interesting data is that there are 1.2 million unique borrowers that have submitted at least one qualifying employment certification since the program's inception.

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by twenty » Mon Apr 12, 2021 12:47 pm

I expect that in the next 2-3 years we start seeing a much higher percentage of successful PSLF discharges and ramp up from there. If I remember correctly, law schools LRAP programs weren't utilizing PSLF at all until C/O 2013ish. Georgetown was an early adopter in late 2010.

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Nebby » Wed Apr 07, 2021 9:30 am

Submitted my annual recertification and up to 51/120 qualifying payments. I can see light at the end of the tunnel!

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Story » Sun Jan 31, 2021 8:06 pm

Nebby wrote:
Sun Jan 31, 2021 7:18 pm
Story wrote:
Fri Jan 22, 2021 5:16 pm
I had no idea about the FFEL issue. Well, time to triple-check with FSA.
If you've ever submitted an employment verification to Fed Loan, then that would have caught this. A lot of folks never submitted those forms before the 10 year mark.
Good to know. Thanks .

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Nebby » Sun Jan 31, 2021 7:18 pm

Story wrote:
Fri Jan 22, 2021 5:16 pm
I had no idea about the FFEL issue. Well, time to triple-check with FSA.
If you've ever submitted an employment verification to Fed Loan, then that would have caught this. A lot of folks never submitted those forms before the 10 year mark.

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Story » Fri Jan 22, 2021 5:16 pm

I had no idea about the FFEL issue. Well, time to triple-check with FSA.

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Nony » Thu Jan 21, 2021 10:26 pm

That's depressing. I do think a lot of it is borrowers getting it wrong, but we're still looking at relatively early adopters and I'm sure the majority of them got terrible advice.

Re: LRAP/IBR/PSLF. How does it work? Let's find out!

by Nebby » Thu Jan 21, 2021 9:59 pm

One of the biggest reasons is because FFEL loans do not qualify - but no one told the borrowers until they started getting denied. A recent report found 1 in 7 rejections are for this reason. Congress should change it. People paid into loans for 10 years that no one told them didn't qualify - and some servicers actually told borrowers that their loans qualified when they didn't. https://www.forbes.com/sites/adamminsky ... borrowers/

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