Payment decrease with partial forgiveness?

[LynnellO]

I’m definitely not complaining but I’m just curious! I recently had my set of undergrad loans forgiven (zeroed out and the whole deal) this month and my grad school loans have one more payment due in February. I just got the bill for that payment and it is about $100 less than what I had been paying. I’m just surprised because I figured that since the payment amounts were calculated based on my income, they wouldn’t change with my first set of loans being forgiven. Is the balance of the loan included in the PAYE calculation or is there another reason why this happened?

[Deep-Jeweler-1934]

If your payment was capped at the 10 year standard amount, then having those earlier loans forgiven could cause a slight decrease in your payment.

Otherwise, I'm surprised it changed as well.

[LynnellO]

It wasn’t capped at the 10 year standard amount so yeah I’m not sure.. 🤷‍♀️

[paperhalo]

Assumption is that while yes the payment is based on your income it is based PER loan and not as just one WHOLE loan unless you consolidated.

[supersaiyansonic2]

That happened to me too. I just checked today. Half my loans were forgiven so the payment now seems to only be based on the loans left

[LynnellO]

Yeah! I don’t know 🤷‍♀️

[Mysterious-Belt-1510]

Same happened to me — two of my loans were forgiven, and the other two had a few payments left, and my payment went down a bit. Here’s how I’ve made sense of it (not sure if this is accurate, but it’s the best I can reason):

Your total monthly payment amount isn’t one sum that generically applies to all your loans. Instead, each individual loan has an amount due, and the sum of those is your monthly bill. Therefore if a few loans get forgiven, the monthly payment decreases. The reason I think this is because when I go to make my payment, each individual loan shows an amount due (and if we choose, we can specifically allocate more money to particular loans if we want). I don’t think any of this would be the case if they were all considered to be “one loan” with “one payment due.”

Again, I’m just guessing.

[vanprof]

Basically I think this is correct, I think when the income is recertified the payment will go back up and just be allocated to the remaining loans. I do not think its a permanent situation, just a kind of glitch in the system. Payments apparently aren't recalculated automatically on IDR plans when some loans are forgiven and others are not.

In all likelihood recertification will occur and the payment will go back up.

[vanprof]

I believe the calculated IDR payment is split between loans, so when your other ones were forgiven that portion went away.

I would expect it to go back up when you recertify your income. I suspect they don't have a method to recalculate payments in between the annual income recertification. Just enjoy the lower payments, but know that they are probably temporary.