If you EVER took out a Fed loan pre-2007, you can't do PAYE Forum

[Bronx Bum]

A lot of bad information going around here. But everyone needs to remember if you EVER had a federal loan in your name pre-October 2007. So if you were a freshman in college and took out a $1000 loan in August 2007 and then took out $200k for law school after that, you CANNOT do PAYE. You can't consolidate after and become eligible. You can't pay that $1k loan off.

YOU. ARE. NOT. ALLOWED.

[bk1]

This is and always has been pretty clearly stated on the PAYE website.

[MKC]

I hadn't really looked into this, but good to know since I had student loans in 1999.

[Bronx Bum]

This is and always has been pretty clearly stated on the PAYE website.

THANKS MAN!

But on TLS, a lot of people misstate that very provision that you cite! Therefore, I wanted to clear it up because it could be a catastrophic mistake for someone to rely on if they have a pre-2007 loan.

[ScottRiqui]

A lot of bad information going around here. But everyone needs to remember if you EVER had a federal loan in your name pre-October 2007. So if you were a freshman in college and took out a $1000 loan in August 2007 and then took out $200k for law school after that, you CANNOT do PAYE. You can't consolidate after and become eligible. You can't pay that $1k loan off.

YOU. ARE. NOT. ALLOWED.

Probably better off just pointing people to the PAYE website, because I don't think what you've posted is correct. The way you've worded it, a person who had *and paid off* a federal loan before October 2007 wouldn't be eligible for PAYE on a new loan, which I don't think is the case.

[Merylian]

Don't scare people too much. People who can't do PAYE can still do IBR, which is not quite as good but still helpful.

Sucks having started college in August/September of 2007 though, since the PAYE cutoff is October 2007

[guano]

This is and always has been pretty clearly stated on the PAYE website.

THANKS MAN!

But on TLS, a lot of people misstate that very provision that you cite! Therefore, I wanted to clear it up because it could be a catastrophic mistake for someone to rely on if they have a pre-2007 loan.

I think it's a catastrophic mistake to rely on PAYE

[rinkrat19]

From the PAYE site:

You also must be a new borrower as of Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011. You are a new borrower if you had no outstanding balance on a Direct Loan or FFEL Program loan as of Oct. 1, 2007, or had no outstanding balance on a Direct Loan or FFEL Program loan when you received a new loan on or after Oct. 1, 2007.

[Bronx Bum]

This is and always has been pretty clearly stated on the PAYE website.

THANKS MAN!

But on TLS, a lot of people misstate that very provision that you cite! Therefore, I wanted to clear it up because it could be a catastrophic mistake for someone to rely on if they have a pre-2007 loan.

I think it's a catastrophic mistake to rely on PAYE

No, I believe I said it better. It's not a catastrophic mistake if you can pay 10% for 20 years and be ok.

[Bronx Bum]

A lot of bad information going around here. But everyone needs to remember if you EVER had a federal loan in your name pre-October 2007. So if you were a freshman in college and took out a $1000 loan in August 2007 and then took out $200k for law school after that, you CANNOT do PAYE. You can't consolidate after and become eligible. You can't pay that $1k loan off.

YOU. ARE. NOT. ALLOWED.

Probably better off just pointing people to the PAYE website, because I don't think what you've posted is correct. The way you've worded it, a person who had *and paid off* a federal loan before October 2007 wouldn't be eligible for PAYE on a new loan, which I don't think is the case.

Ah! You corrected me on that point. Thank you kindman!

[Bronx Bum]

Don't scare people too much. People who can't do PAYE can still do IBR, which is not quite as good but still helpful.

Sucks having started college in August/September of 2007 though, since the PAYE cutoff is October 2007

Same here. I had one loan from August 2007. 5% for 25 years is awful man, anyway you cut it. AND our tax bomb is going to be worse.

YIKES BROTHER.

[ScottRiqui]

A lot of bad information going around here. But everyone needs to remember if you EVER had a federal loan in your name pre-October 2007. So if you were a freshman in college and took out a $1000 loan in August 2007 and then took out $200k for law school after that, you CANNOT do PAYE. You can't consolidate after and become eligible. You can't pay that $1k loan off.

YOU. ARE. NOT. ALLOWED.

Probably better off just pointing people to the PAYE website, because I don't think what you've posted is correct. The way you've worded it, a person who had *and paid off* a federal loan before October 2007 wouldn't be eligible for PAYE on a new loan, which I don't think is the case.

Ah! You corrected me on that point. Thank you kindman!

You're welcome. And frankly, the PAYE website isn't that much clearer anyway. The definition of "new borrower" that Rinkrat posted earlier makes it sound like you could have had a balance in October of 2007 and still be a new borrower today, as long as you had paid it off before getting the new loan. But to hear other people talk about it, if you had any kind of a balance left as of October 2007, you're not eligible for PAYE on existing or future loans, period.

[Tiago Splitter]

It's not a catastrophic mistake if you can pay 10% for 20 years and be ok.

IBR is only slightly worse. If you think PAYE is so great, why are you running around TLS telling people you'll never be able to start a family because of your law school debt? IBR is nearly the same damn thing.

[dj_roomba]

Don't scare people too much. People who can't do PAYE can still do IBR, which is not quite as good but still helpful.

Sucks having started college in August/September of 2007 though, since the PAYE cutoff is October 2007

Same here. I had one loan from August 2007. 5% for 25 years is awful man, anyway you cut it. AND our tax bomb is going to be worse.

YIKES BROTHER.

Fuck!

I thought this was no big deal to me either because I thought I met the cutoff. In that case I don't qualify.

FUCK NUTS

[Bronx Bum]

It's not a catastrophic mistake if you can pay 10% for 20 years and be ok.

IBR is only slightly worse. If you think PAYE is so great, why are you running around TLS telling people you'll never be able to start a family because of your law school debt? IBR is nearly the same damn thing.

How on earth is 5% of your income EXTRA for 25 years the same thing? That's 50% MORE than what PAYE people pay. Think about it. You and PAYE people each make payments for 20 years. Expect you pay 50% MORE than them. Then BAM, 20 years comes. They stop but YOU KEEP PAYING. And then, because of interest, your tax bomb grows larger than theirs was!

IBR is a terrible deal!

[Bronx Bum]

Don't scare people too much. People who can't do PAYE can still do IBR, which is not quite as good but still helpful.

Sucks having started college in August/September of 2007 though, since the PAYE cutoff is October 2007

Same here. I had one loan from August 2007. 5% for 25 years is awful man, anyway you cut it. AND our tax bomb is going to be worse.

YIKES BROTHER.

Fuck!

I thought this was no big deal to me either because I thought I met the cutoff. In that case I don't qualify.

FUCK NUTS

TCR. and so few know about how unfair this is. It SHOULD be the loans you take our post 2007 are PAYE eligible--NOT DISQUALIFY THE WHOLE THING.

[quakeroats]

I haven't looked into this, but based on my reading of the Regs 6 months ago, it seemed that if you paid off all 2007 loans before entering law school the PAYE prohibition wouldn't apply.

[Bronx Bum]

I haven't looked into this, but based on my reading of the Regs 6 months ago, it seemed that if you paid off all 2007 loans before entering law school the PAYE prohibition wouldn't apply.

If you paid them off BEFORE October 2007, seems like you're ok. If not, you're stuck in IBR.

[ScottRiqui]

I haven't looked into this, but based on my reading of the Regs 6 months ago, it seemed that if you paid off all 2007 loans before entering law school the PAYE prohibition wouldn't apply.

If you paid them off BEFORE October 2007, seems like you're ok. If not, you're stuck in IBR.

From the second part of the regulation rinkrat posted, it sounds like you could even pay them off after October 2007, as long as they were paid off by the time you took out the new loan:

"You also must be a new borrower as of Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011. You are a new borrower if you had no outstanding balance on a Direct Loan or FFEL Program loan as of Oct. 1, 2007, or had no outstanding balance on a Direct Loan or FFEL Program loan when you received a new loan on or after Oct. 1, 2007."

[A. Nony Mouse]

Sweet god. Sure, IBR isn't as good as PAYE, but it's a heck of a lot better than paying off the whole thing. No one is entitled to loan forgiveness. Take a few deep breaths.

[quakeroats]

§ 685.209 Income-contingent repayment plans.

...

(iii) Eligible new borrower means an individual who—
(A) Has no outstanding balance on a Direct Loan Program Loan or a FFEL Program loan as of October 1, 2007, or who has no outstanding balance on such a loan on the date he or she receives a new loan after October 1, 2007; and
(B)(1) Receives a disbursement of a Direct Subsidized Loan, Direct Unsubsidized Loan, or student Direct PLUS Loan on or after October 1, 2011; or
(2) Receives a Direct Consolidation Loan based on an application received on or after October 1, 2011, except that a borrower is not considered an eligible new borrower if the Direct Consolidation Loan repays a loan that would otherwise make the borrower ineligible under paragraph (a)(1)(iii)(A) of this section;

[Bronx Bum]

I haven't looked into this, but based on my reading of the Regs 6 months ago, it seemed that if you paid off all 2007 loans before entering law school the PAYE prohibition wouldn't apply.

If you paid them off BEFORE October 2007, seems like you're ok. If not, you're stuck in IBR.

From the second part of the regulation rinkrat posted, it sounds like you could even pay them off after October 2007, as long as they were paid off by the time you took out the new loan:

"You also must be a new borrower as of Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011. You are a new borrower if you had no outstanding balance on a Direct Loan or FFEL Program loan as of Oct. 1, 2007, or had no outstanding balance on a Direct Loan or FFEL Program loan when you received a new loan on or after Oct. 1, 2007."

Ah, you corrected me twice! OWAS!