So I was surprised to find a $1000 automatic debit from my bank today. Apparently my repayment plan automatically switched from pay as you earn to standard repayment because I didn't submit paperwork to renew my IBR/PAYE. I never received any reminders or notices that I was even supposed to turn this paperwork in. The worst part is my next payment due in a few weeks is $3000. No way I can afford that on a resident salary. I am seriously considering switching to forbearance. Anyone have a similar experience?
Didn't renew IBR, options?
- Thread starter rads321
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I believe all you have to do is go online to the IBR website and enter your income, etc.., and your payments will be reduced.
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It can take a couple of weeks to a few months for the IBR application to be processed. I'd submit the paperwork today to reapply for IBR, but I think forbearance until that is possibly your only option. But you could wait to do that until just before the payment is actually due--call your servicer and ask what the last day you could call for the temporary hardship forbearance is. Literally you can call them and ask for forbearance of up to a year and you'll get it if you haven't exhausted your 3 years or temporary hardship forbearance (which is different than residency forbearance, but you need to fill out paperwork and wait for processing for residency forbearance)
Mark your calendar 10 months from when you sign up for IBR. Most lenders don't remind you (I don't know why) and it's completely up to you to remember. If you forget to reapply then you get kicked out of IBR, which means a big payment, plus you interest will capitalize.
Mark your calendar 10 months from when you sign up for IBR. Most lenders don't remind you (I don't know why) and it's completely up to you to remember. If you forget to reapply then you get kicked out of IBR, which means a big payment, plus you interest will capitalize.
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The hitch with switching into forbearance is that all your accumulated interest will capitalize. This is a bad thing to be avoided.
Rads321, I had the same thing happen to me a few years ago. Call your servicer and tell them that you didn't receive notice to resubmit documentation of your income. They glitch on sending out notices all the time and generally know that there was likely a mistake on their end. Tell them that you want your account to remain in IBR until they process your application and that you do not want your interest capitalized. If the first person that you talk to pushes back, hang up and call again. If you're not getting anywhere the first few tries, ask to speak to a supervisor. Make a note of everyone's name and the date/time that you spoke with them and ask them to generate a letter and send it to you agreeing to hold your account in IBR without interest capitalized until your IBR re-application is processed.
I did this and it worked great. No payment due bigger than my paycheck and the interest didn't capitalize.
Rads321, I had the same thing happen to me a few years ago. Call your servicer and tell them that you didn't receive notice to resubmit documentation of your income. They glitch on sending out notices all the time and generally know that there was likely a mistake on their end. Tell them that you want your account to remain in IBR until they process your application and that you do not want your interest capitalized. If the first person that you talk to pushes back, hang up and call again. If you're not getting anywhere the first few tries, ask to speak to a supervisor. Make a note of everyone's name and the date/time that you spoke with them and ask them to generate a letter and send it to you agreeing to hold your account in IBR without interest capitalized until your IBR re-application is processed.
I did this and it worked great. No payment due bigger than my paycheck and the interest didn't capitalize.
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This is probably the better way to go. Technically your interest should capitalize whenever you leave IBR (basically anytime you change repayment plans) and not just enter forbearance, but I've found that eventually if you talk to enough people someone will finally do what's best for you. I had a different situation, but after about 2-3 months of talking with my loan servicer/waiting for them to review, re-review, and re-re-review my consolidation loan application, my case my financial aid director eventually got in touch with one of the supervisor's supervisor and they fixed a botch-up of my consolidation loan (and retroactively applied the fix). So it seems smart to do what Call Me Dr said.
+1 on writing down who you talk to, an when. I do that everytime I contact my servicer, bank, insurance companies, etc.
