So thankful I found this blog! I got a call from invio document preparations and was so confused as to who they were and what they were offering. With a quick google search and this site it quickly explained I should never have to pay ($900) for student loan consolidation! So, now to my questions.
I have $43,718 in student loan debt. My plan is to consolidate my loans and then do public service loan forgiveness since I am a public school teacher. (Even though reading horror stories from people not getting approved towards the end of their PSLF is a little scary.) My question is how do I know which repayment plan to choose? I want to choose the one with the lower monthly payments, but I wanted to come here first to see what would be best option before choosing and moving forward with the consolidation request online. With REPAYE my monthly payments would be $58. With PAYE it would also be $58 monthly; I know it said you have to have partial financial hardship so I wasn’t for sure about that one. IBR for new borrowers would be $58 and then IBR would be $88. All over 120 months. Which one would be the best to choose?
I also have one more question. On the application it says to put in your AG to help estimate monthly paymentsI. I see that number on my taxes, but I also have another taxable income number that is significantly lower because my husband is a pastor. I called the loan consolidation department at the department of education and asked if I could use the taxable income number on taxes for the AGI and they said yes. Even though it is a different number than my AGI. I saved and filed the email summarizing my call. It obviously brings my monthly payments down. I just don’t want to put this and then it come back that I put the wrong number knowingly. Does this sound right?
Thanks so much for your help. I have been putting this off until after I finished graduate school and have been dreading it. But your site has helped me know I have choices and to ask questions. Thanks!
May 3, 2014
Picking the best repayment plan will depend upon your circumstances. For starters, not everyone can sign up for PAYE, so first figure out if you are eligible (this will be based upon the time you took out your first federal loan). Does you husband have federal student loans? Will he be on an income driven plan? Will you be filing your taxes jointly or separately? These questions will make a big difference as to which plan is best for your circumstances.
As for your income question, my understanding has always been that it is based upon the AGI line on the tax return. When you fill out your application for an income driven plan, the IRS sends over your tax results and the process all happens automatically, so it is not clear which line they are pulling from.
Thank you for the kind words, and good luck! It sounds like you are well on your way to getting things figured out.
Thanks for the info. I need to figure out if I am eligible. My husband does have federal student loans. His total is around $38,000 and he will be on an income driven plan as well. We have filed our taxes jointly in the past.
For the income, the representative I talked to today said I could take our taxable income from line 43 on page 2 of our 1040. I had heard the information you are giving about the IRS sending over our taxes so was I unsure about putting that number.
Thanks for the quick response!
I called fedloan today to double check my eligibility for PAYE and my loans do qualify if I am consolidating.
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