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When to switch to IBR for PLSF?

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  • When to switch to IBR for PLSF?

    Hi everyone,

    Thanks for the help in the past.

    I will be starting a new job on July 1, after finishing a 6 year residency/fellowship (unfortunately only 5.5 years of PSLF payments since I didn't consolidate until after my 6mo grace period). I am currently on the REPAYE payment pathway. I don't qualify for PAYE given the age of my undergrad loans. I have appx $190,000 in Direct (sub/unsub) loans at 6%.

    I just resubmitted my yearly income sheet and will expect to have another 12 months before they start asking again. At that time, I will be making the income of an average junior academic surgical sub-specialist. Given that REPAYE has a lack of a cap, I will be paying more than the 10 year repayment pathway, by a lot, for my last 3.5 years of payments on the PSLF pathway. I would rather not do this if I didn't have to.

    I was planning on switching to IBR. I need to do this while I still have a financial hardship though. When would be the best time to do this? (the month I graduate? now?)


  • #2
    I'll preface this by saying things have changed on this front and I'm a random person on the internet, so go ahead and confirm this with other sources:

    A few years ago, the main question that affects this on the IDR Plan Request form read something to the effect of "Has your income/AGI significantly changed since your last tax filing" with no definition of 'significantly changed' to my knowledge - confusing and arbitrary! Thus all the recommendations were to do this change to IBR/PAYE before finishing residency.

    Not sure when they changed it, but it's relatively recent - that question on the form is now "has your income significantly decreased since the last filing". Thus, assuming you filed taxes this year, you should be able to wait until before filing (probably at least a month before just to be safe since it takes time to process). I state should in italics because the application has changed before and who knows if it'll change again in the timing between now and then! I wouldn't bet on it changing if I were you, but that's at least a known risk of sorts to consider.