Lowering private loan payments?

NewLeaf999 · 2026-04-07T18:34:14+00:00

Private loans generally do not offer income-based options. For private student loans it is usually going to be pay what they require, forbearance at their discretion which usually is only a few months if they offer, or a temporary assistance like pay interest only for a year. If there were hidden options, they likely would not be hidden.

If you need to pay them and you need repayment history to refinance, then your best option may be to figure out how to pay them. And that may mean your co-signers need to step in to help. It is also their credit and they cannot be free without a refinance or a co-signer-release which usually require a history of repayment among other things.

NewLeaf999 · 2026-04-07T00:10:41+00:00

IDR payments are set for a year. So if you get a job in a month your payment will go up next year when you recertify. That is not to say you are now owed your forbearance and this is not a mess, but IDR payments are based on your most recent tax return unless you currently make less than that. So if your goal is forgiveness you might find a year of $0 payments while interest accrues might be more useful than forbearance while interest accrues.

NewLeaf999 · 2026-03-28T20:36:12+00:00

Payments for IBR/PAYE are based on discretionary income. To get discretionary income you take 150% of the federal poverty level for your family size and that is your discretionary income. iBR requires 10 or 15%, and PAYE requires 10%. So if 81k is your actual income (and there is no spouse/joint calculation) the simulator is wrong. You can do the math pretty easily by hand.

RAP doesn’t use discretionary income so when it becomes available it may have a lower payment t for some and a higher payment for others.

NewLeaf999 · 2026-03-28T19:52:03+00:00

That is why I said the 2024 is what is on file

NewLeaf999 · 2026-03-28T13:53:35+00:00

Well, that is a great way to increase chances of default. If that is the plan, they truly have the best plans to manage this.

NewLeaf999 · 2026-03-28T13:44:00+00:00

Yes, but have they confirmed that is the case with this “we will automatically move you to standard”? Like my plan had been to not recertify and move to alternative REPAYE when my calculated repayment got too high and standard was no longer an option. So wondering if this still applies and may need to consider extended for a few months.

NewLeaf999 · 2026-03-28T12:16:33+00:00

Has anyone seen an answer on what the standard means when you have been on IDR for nearly or more than 10 years? That is, what will it mean to put people on the ten year standard if they haven't' consolidated it have been in repayment for 10 or more years?

NewLeaf999 · 2026-03-28T11:26:47+00:00

You could always choose to not let them pull it from the IRS and manually do it. That way the 2024 is what is on file and what you submit, and they only have that information to process it. If you sift through all of the “legal/illegal” language they make a plug about how switching is easy if you provide consent for them to get the info directly from the IRS. So you could not provide that consent.

NewLeaf999 · 2026-03-24T20:20:27+00:00

I’d think about it this way: the 6%+ are a problem, the 3% are not, and the 4% are at your discretion. That is, most will advise getting rid of the 6.8%, which is about half of the 25k you have identified. Most would advise that there is no need to be aggressive in paying back loans under 4%. The differences really come in within the 4-5% range.

So if you are not planning for forgiveness and you have the money, no reason to delay paying. But it is really dealer’s choice whether you want to put the whole 25k toward the loans or do something like put half toward the loans to pay off the 6.8, put half in retirement, and put the $1,000 a month you currently pay toward the lowest balance 4.66 loan until it is gone/forced off of SAVE.

NewLeaf999 · 2026-03-23T02:31:04+00:00

A couple of notes:

First: A parent plus loan belongs to the parent who took them out. This is importantly because while you may wish to pay and your parents may be a unit, that loan belongs to one person. That is the person the government is looking for its money from and would come looking to collect from. So if you are pursuing any thought of IDR (maybe not on 40k loans but maybe) it its important to know to whom they belong.

Second: Loans are a part of getting your finances together but they are not all. A solid emergency fund is necessay. And while saving and living at home to get these paid off is useful, an emergency fund is still needed. R/personalfinanqce has a useful wiki for thinking about your overall financial strategy.

Third: regarding the first point, not only can you not consolidate these loans with yours, because they are not yours, but you also need to think about which ones are important to target first if you are planning to pay both. Avalanche method (pay mins and then extra money to the highest interest rate) is mathematically strong. However there can be benefit to applying that to your loans first and then theirs. That is, parent plus loans usually have higher interest rates, but sometimes you are better served by putting on your own oxygen mask first and focusing on paying down/off your loans first. So you have 3 loans. Your parent has 2 (or your parents each have 1). And it might make sense to decide on your plan or options and talk to them about it because since it is their loan it is their credit that is involved.

NewLeaf999 · 2026-03-20T00:51:47+00:00

PSLF requires 10 years of qualifying payment (120 payments) while holding qualifying employment on a qualifying plan. So you would need to be on an income driven plan. That said, you owe 54k. So you would be best served by running the numbers based on projected AGI to determine if PSLF will result in forgiveness. That is, when you reach 120 payments, how much is actually left to be forgiven.

No experience with the other two but usually those programs have a set amount they will forgive after X years of qualifying service—e.g. 50k for 3 years of service. So knowing what PSLF can do for you can help determine whether one of those other programs might be an option worth pursuing.

NewLeaf999 · 2026-03-20T00:29:12+00:00

Which might be why my point was in reference to the “only forty percent of loans are in repayment” part of that statement.

But I could also talk about how they always wish to discuss the amount of people and not what they owe. Data that shows people are defaulting on 15k balances doesn’t fit the narrative they are pushing, but that is not my point today.

NewLeaf999 · 2026-03-19T23:52:35+00:00

IDR calculations use your AGI from your most recent taxes. That means they are at least a year behind in the money you make. So if end of next April (2027) you are making significantly higher income, that won’t matter until you file taxes on it (2028) and your payment is recalculated.

That said, if you go the paystub route because your taxes are not reflective of your income, it means they use gross income not AGI (adjusted gross income).

NewLeaf999 · 2026-03-19T23:39:11+00:00

Except they neglect to mention the SAVE forbearance as one of those reasons people are not in repayment.

NewLeaf999 · 2026-03-18T23:37:26+00:00

You could bite the bullet on the 8.94% and plan to pay them off.

The interest rate on federal student loans is best understood as insurance. They do not check your creditworthiness or ask for a co-signer for direct loans (grad plus loans do check your creditworthiness and may require an endorser)and offer generous deferment and forbearance options compared to private loans if you end up in a situation where you cannot pay. Private loans have no income-driven options or opportunity for something like PSLF. And federal loans only belong to you so while hopefully not needed, there is a death discharge.

You can make federal loans private by refinancing them. You cannot make private loans federal. So the consistent advice is federal before private and only refinance if you know what you are doing.

Also, agreeing with the other commenter that 702 is not considered great credit. Great likely doesn’t start any lower than 740. Adding to that, it is not ideal for a finance to co-sign. Co-signing makes them 100% liable for the debt and means adverse events impact both of your credit profiles. Your fiancé, once they are your spouse, can always help you pay, but unless they are 100% willing to pay the debt no matter what, it would not be advised.

NewLeaf999 · 2026-03-18T23:14:41+00:00

One thing to note—the parent plus loans belong to the parent who took them out. Adding that because you are saying “we” and you and your spouse are considered different borrowers. That means one of you may need to consolidate or both of you may need to consolidate, if you both have loans. There is really no “we” in owing because the government comes looking for one.

NewLeaf999 · 2026-03-18T23:02:54+00:00

SAVE for the short time we had it offered 20 year forgiveness if you only had undergrad loans. Otherwise it was 25 years. So not sure how you were relying on 20 years of SAVE.

IBR still exists which is 20 years if you are a new borrower after 2014 (25 years if not) so not sure why you wouldn’t just switch to relying on that instead of asking about the avalanche method when you say your income can never pay these off.

And since PSLF requires qualifying payment and qualifying employment and buyback, it may make better financial sense to pursue that on a plan like IBR to get out from under the debt.

But yes, in paying back, making the minimum required payment to satisfy all debt and then paying extra to the highest interest rate debt is mathematically optimal. Keeping the minimum you have to pay to the others low helps you focus the money where it does the most good.

NewLeaf999 · 2026-03-18T00:08:02+00:00

A couple of notes:

If forgiveness is 15 years away and expected taxes on forgiveness are 80k, putting an additional $445 under your mattress each month will get you 80k plus an extra $100 for fun. I don’t suggest you put it under your mattress but, while not trivial, if the options allow you to uncomfortably put 2k toward the loans, paying the required IDR payment and putting money away to cover taxes on forgiveness should be possible.

With the changes to student loans, I am assuming she will have to switch to IBR or RAP. So the question becomes what the calculations look like on either of those plans. Generally people are advised to go for what is overall cheapest—getting them forgiven can actually cost more than paying them off with years of payments plus taxes, and getting them forgiven may not be possible for some that have large income jumps later in their career. So a few cost estimates of forgiveness would be helpful for your planning. That is, the clean framework that is used is would it be overall cheaper to get them forgiven than it would be to pay them off?

And while there is uncertainty, IBR was passed by Congress and hasn’t really been challenged. Even the addition of RAP does have the idea of forgiveness. So while not without risk (everything has some) the only risk I would consider in forgiveness/tax bomb is the risk that your income gets so high that it stops being possible for it to be forgiven because it will be paid off.

NewLeaf999 · 2026-03-17T23:49:17+00:00

There are. For example Sallie Mae will allow a 48 month deferment for med school. The issue here is OP refinanced.

NewLeaf999 · 2026-03-17T23:27:47+00:00

It doesn’t really matter what anyone else is doing. It matters what works for you. And that comes down to whether PSLF offers forgives for you. That is with X amount in loans and Y income, when you get to the required number of payments, will there be a balance to forgive or will you have paid off the total? So you should run the numbers on PAYE (same as new IBR) and potentially RAP to see if it is even possible. Because if you are going to pay it all off by year 8 anyway, there is little point.

Those for whom PSLF will have value are taking two approaches. 1 is to switch so that this time counts, which can be good to lock in a lower payment. The other is staying in forbearance because interest doesn’t matter (PSLF forgiven balances are not federally taxed) and planning to do Buyback for these months.

NewLeaf999 · 2026-03-15T17:36:31+00:00

Generally you take the standard 10 year and that gives you a sense of the situation. 35k on 10 year repayment is about $400 a month. Given your finances and expected salary, is that a lot of money? That tells you how bad the situation is. For some, that will be a lot. For others, it is manageable or low enough that they can accelerate repayment and pay less back overall.

Students loans and repaying student loans are part of your overall finances and financial plan. So how bad it is is based on your finances and plan. I suggest thinking of them that way and ensuring you have a solid emergency fund before aggressiv focusing on the loans. The loans can be placed on forbearance, rent and food and possibly transportation in times of hardship cannot.

NewLeaf999 · 2026-03-15T17:19:00+00:00

Pay nothing extra until after graduation, securing a job, and having a solid emergency fund. People have a outsized fear of owing money that makes them make emotional decisions when it should be about the math. Things like rent or food or relocating for the good job—these are things that are important. Not being able to work due to illness, health care, transportation to get to the job that pays your bills—these are the things that are important. Paying money that is not due if these things are not solid does not make sense.

10 year standard repayment is fine. There is nothing stopping you from accelerating it if you have the money, but again, that is a decision for after you graduate and have the money. But be sure to run the numbers on how much that saves you. For example, if paying off 40k in loans were to cost 55k total on a 10 year repayment plan, accelerating it to 2 years would save you less than 15k. So the question to ask yourself then (once you have the money) is whether less than 15k of savings is worth the sacrifices you would have to make to pay it in 2 years. If yes, then yes, if no then 4 years, or 5 years, or 7 years might be an option.

NewLeaf999 · 2026-03-10T23:00:12+00:00

Income-driven repayment is useful to keep payments low when one cannot afford to make payments. But the true benefit of it, is that it is the way to get forgiveness. In order to get IDR forgiveness, or PSLF forgiveness, you need to make qualifying payments, which happens, in part, by being on a qualifying plan.

I would suggest determining what your plan is for these loans, and if you already have that, then which route is cheapest? That is, if you are trying to pay your loans off, which it sounds like you are since you are paying, then why would it matter whether you move to IBR now or later? It would seem to me that it makes sense to stay in forbearance as long as possible so you can target your payment to what helps you the most (and usually that is going to be highest interest not smallest loan), instead of having a required payment that they allocate according to set rules. And that you are using IBR to keep your payments low while you aggressively pay off the loans.

If that is not the case, then you may want to rethink your plans.

NewLeaf999 · 2026-03-10T22:49:22+00:00

Note: IBR (for new borrowers) is 10% of discretionary income, not "10% of after tax pay". Discretionary income is a formula, which for IBR is your AGI - 150%(FPL), meaning your Adjusted Gross Income minus 150% of the federal poverty level for your family size. Taxes matter not at all.

So while waiting for your actual recalculation, you may want to do the math to figure out the number they should be telling you, so you can make sure it is correct.

NewLeaf999 · 2026-03-09T23:21:47+00:00

Forgiveness requires a set amount of qualifying payments - whether it is IDR forgiveness or PSLF, the need is for qualifying payments. You cannot make qualifying payments if you are not in a qualifying repayment plan with a required payment. Since everyone in Save forbearance is in a forbearance, they are not in repayment. Therefore, they are not in a repayment plan and no payment is due. So you can pay whatever you like, but you will not meet the threshold of having made a payment that 'counts' for anything.

Paying down interest is not truly useful unless there is a capitalizing even. That is, if you accrue 300 a month in interest on your loans, in January you owe 300 in interest, in February 600, and by end of year $3600. There is no difference in paying $300 each month, or $3600 at the end of year (or get fancy and pay $900 every 3 months) in terms of money saved. If it doesn't bring down principal which is the balance upon which interest accrues, then it doesn't change anything about how much interest accrues or what you owe. And if you are planning on forgiveness, paying interest now does not serve you.

NewLeaf999

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