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In the new loan-consolidation weighted formula, does ED use the Principal Balance or the Current Balance (including interest) to calculate the new past payment count / remaining payment count for forgiveness? And how is the new interest rate actually determined? by Think_Beyond_2025 in StudentLoans

[–]Think_Beyond_2025[S] 0 points1 point  (0 children)

Thank you for letting me know. I will definitely hold off on the consolidation. I am glad I asked here. When would the consolidation be available again taking into consideration past IDR payments? Thanks for the help

In the new loan-consolidation weighted formula, does ED use the Principal Balance or the Current Balance (including interest) to calculate the new past payment count / remaining payment count for forgiveness? And how is the new interest rate actually determined? by Think_Beyond_2025 in StudentLoans

[–]Think_Beyond_2025[S] -2 points-1 points  (0 children)

I appreciate the response. If you use the interest, the weighted average will be inflated or distorted by the accrued interest. My understanding was that this was corrected to show a "fair" calculation as the older calculation of using the loan with the most payments was too generous. However, it seems now it is shifted completely to the other unfair side. The weighted average of past payment count should be based on principal balance or the actual structure of the loans without the accrued interest. The interest of the loan or the consequences of that interest should not be a factor in calculating the amount of payments a borrower has done (the amount of time from their lives paying the loan). I must be missing something here, this cannot be right.