The Department of Education (ED) has created a new income-driven repayment plan request for the Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based (IBR) and Income-Contingent (ICR) repayment plans under the William D. Ford Federal Direct Loan (Direct Loan) and Federal Family Education Loan (FFEL) program.
I have reviewed this form closely and have had extensive discussions with my fellow student loan attorneys are we think this form will drive us all nuts!
In this series of articles, I am going to discuss this form in detail and give you my thoughts and guidance.
Trouble Starts with Section 2: Repayment Plan Or Recertification Request Box “Read Before Completing This Form.”
Problem One: “Income-driven repayment plan offer many benefits, but may not be right for everyone”.
What an understatement? This form doesn’t take a comprehensive look at your federal student loan picture because it does not consider the status of each of your loans. Are you current on some, in deferment or forbearance on others, in default on others, in default and being garnished on others, or in a rehabilitation program to get some loans out of default? This is flat out wrong because while each loan should be looked at individually, the bigger collective picture about the current and future status of your loans must be considered.
Worse yet, this statement doesn’t address what type of loans you have, whether you need to consolidate your loans and the impact of consolidation.
You just don’t have a clue!
Problem Two: “You can learn more about these plans at StudentAid.gov/IDR and by reading Sections 9 and 10”.
It isn’t that simple! Yes, you can read Shakespeare but how many times do you have to re-read it before you get it? Not once or twice! Reading won’t give you a comprehensive analysis or a road map to your current and financial future.
Problem Three: “It is simple to explore all of your repayment options at StudentAid.gov/repayment-estimator”.
It isn’t simple to determine your discretionary income and just getting repayment estimators won’t help you with the big picture. What happens if you lose your job, get an increase in salary, get married or have children? The estimator won’t give you the right answer for today, tomorrow, 5 years or 25 years from now!
Problem Four: “If you need help completing this request, contact your loan holder or servicer for free assistance.”
The assistance may be free but it is rarely right! The loan holder or servicer has little financial incentive to give you advice that impacts their bottom line, especially if you are in default, garnishment or rehabilitation attempting to negotiate reasonable and affordable payments to get out of default.
Do you ask the IRS for assistance in filing out your income tax form? Do you get the same answer to your questions if you ask twice? Do you really think you are going to get a personalized solution to your problems by asking your loan holder or servicer for free assistance? No, no and no!
What You Should Do If You Are Trying To Apply for An Income-Driven Repayment Request?
You should contact the Student Loan Law Resolution Center for a consultation. It is not free! It costs money to get a comprehensive analysis of your federal and private student loans and a personalized plan for managing those loans which you can implement on your own or with our assistance.
That free advice you get from your holder or servicer can destroy your financial future.
Don’t you owe it to yourself and your family to get answers that are right for you? Call today at 727-828-9955 to schedule your FREE consultation about your student loans.