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Earliest possible moment to enroll in REPAYE?

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  • Earliest possible moment to enroll in REPAYE?

    What is the earliest possible moment you can enroll in REPAYE so as to start accumulating $0 payments towards PSLF as early as possible? I'm an MS4 who will be graduating in May

  • #2
    Do it right after graduating. It can take just a few weeks up to a few months depending on luck to actually get consolidation accepted and $0 payments started! There was a poster a few years back i recall saying that their consolidation took something like 6 months to go through. Point being the exact moment you do it doesn’t matter that much since you are at the mercy of the turning gears of government. But to answer directly, I’m almost positive that the requirement is that you are no longer in school (meaning you leave or graduate).

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    • #3
      I could be wrong, but I think you can enroll in REPAYE at any point in time(as long as you have eligible loans), however, qualifying payments don't start until you're employed full time by a qualifying employer. https://studentaid.gov/manage-loans/...-driven#repaye

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      • #4
        You need to get out of the grace period ASAP, so you need to consolidate your loans with FedLoan ASAP. You can only consolidate your loans once you enter the grace period/leave school.

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        • #5
          MedStudent I had the same question. I am also a MS4 graduating in May, however my last date of rotations is next week. According to my school, I will lose my student status at that point and time and they will update my loan servicers of this.

          Am I then eligible to enter REPAYE at that time once I lose student status, or do I have to wait until I officially graduate?

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          • #6
            “According to my school, I will lose my student status at that point and time and they will update my loan servicers of this.”
            The question is how the update. Do they update with an effective date. Date of graduation 5/15/20
            Lose it now or “post dated”.

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            • #7
              Is there any benefit to consolidating early and forgoing the grace period if I'm only using REPAYE for the low effective interest rate during residency and not going for PSLF (i.e. low fed loan balance and planning to refinance privately once I'm an attending).

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              • #8
                Originally posted by mtbMD View Post
                Is there any benefit to consolidating early and forgoing the grace period if I'm only using REPAYE for the low effective interest rate during residency and not going for PSLF (i.e. low fed loan balance and planning to refinance privately once I'm an attending).
                Also interested in this. Can anyone follow up?

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                • #9
                  Sorry I didn't see this earlier to respond as I usually like to respond to all the student loan questions I can, but I suspect that there were no responses because this one's pretty self solving.

                  If you go on grace period - not required to make payments, but interest grows at 100%.

                  Consolidate and enter REPAYE immediately - not required to make payments (assuming no income, entering residency, yada yada), but interest grows at 50%.

                  Capitalizing interesting, subsidized loans and other things may effect the math, so feel free to pull out the Excel to solve for your own scenario, but it seems like an easy answer to me.

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                  • #10
                    Nah you didn't miss it, I'm just a new member so it was held in moderation for a bit. Thanks for the help!

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                    • #11
                      I’m a current intern and did this last year. I had to have first entered the grace period (once I graduated from medical school). For most MS4s, you’ll be finishing in May and will then enter the grace period once you graduate in May. That’s the time to immediately apply for a Consolidation Loan and RePAYE once you’ve graduated. FedLoan took a while for their paperwork to show I was in the grace period, so I had to wait until early June before they could process my application.

                      (1a) file your taxes for 2019 to show that you made $0 income. (This isn’t actually required, but it just makes it cleaner for showing that you had no income in 2019.)
                      1) As soon as you graduate in May 2020, consolidate your Federal Student Loans with FedLoan (assuming there’s even a small chance you’d consider PSLF). You use your 2019 tax return that shows $0 income.
                      2) Apply for the RePAYE program when you do the consolidation loan. This will cancel your grace period and make payments start right away.
                      3) Set up automatic withdrawal from your checking account. This saves a quarter percent interest, even if you’re paying $0 payments.
                      4) Wait while FedLoan processes the paperwork. I believe my first payments came in July or August.


                      5) As an intern, pay $0 monthly payments. The Federal government subsidizes half of that interest, so your effective interest rate will be very low.
                      6) After a year, in May or June of 2021, re-certify your annual income. You’ll use your 2020 tax return from intern year, which will show an income of around $30,000 or less. Doing this should give you monthly payments of $100 or less all the way through 2022.

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                      • #12
                        Outdoors, this sounds like a great plan, and I'm all set to follow in your footsteps-

                        HOWEVER, with the suspension of the interest on all fed loan payments as part of the COVID-19 stimulus package, does this change the calculus in any way? Should I wait to consolidate and enroll in REPAYE until the interest suspension ends? Or does not matter and I should just stick with the plan of consolidating as possible and enroll in REPAYE just as I would have before?

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                        • #13
                          I think you should stick with the same plan to consolidate as soon as possible: once you submit your current income of $0, that locks in your $0 monthly payments until May/June of next year, so you'll have a full year of making $0 payments. I haven't read the details of the law, but I assume the interest-free period won't last forever.

                          Plus, each month you're in repayment counts toward the 120 monthly payments for PSLF if you decide to go that route. Just at some point during internship fill out the paperwork that your institution is a nonprofit organization.

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                          • #14
                            Originally posted by mtbMD View Post
                            Outdoors, this sounds like a great plan, and I'm all set to follow in your footsteps-

                            HOWEVER, with the suspension of the interest on all fed loan payments as part of the COVID-19 stimulus package, does this change the calculus in any way? Should I wait to consolidate and enroll in REPAYE until the interest suspension ends? Or does not matter and I should just stick with the plan of consolidating as possible and enroll in REPAYE just as I would have before?
                            I have the same issue as a graduating MS4. It seems like all federal loan interest has been halted for the next half-year. I am still planning on consolidating and entering REPAYE. We will also receive the stimulus check, given that we submit a 2019 tax return.

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                            • #15
                              Is it possible to consolidate now before graduation, and then apply for REPAYE in May? When I look at the application it seems like you have to do both at the same time...

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