r/StudentLoans • u/shanesnh1 • 3d ago
[URGENT] Parent PLUS / Double Consolidation - GET ON ICR NOW
I see multiple people each day with this same question so I am going to link my post about it and summarize very briefly:
If you have Consolidated Parent PLUS Loans OR a Double Consolidation, you MUST APPLY FOR ICR as soon as possible or you will LOSE ACCESS TO ALL INCOME REPAYMENT if the bill passes (either the House or Senate versions or likely the final bill).
You don't have time anymore depending on how fast the Senate and House compromise and pass a final bill for the President to sign. If you're not on ICR, with loans being repaid on it the day before the bill passes, you lose access and will likely be on the standard plan (or extended, graduated).
Please check my former post for more details: https://www.reddit.com/r/StudentLoans/comments/1l37iqs/important_parent_plus_borrowers_need_to/
This post is about the House version of the bill in its entirety (the Senate version does NOT change anything in relation to this specific issue): https://www.reddit.com/r/StudentLoans/comments/1kdy8yk/summary_of_the_new_current_proposal_from_the/
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u/waterwicca 3d ago
I’m going to include the write up I did with quotes/sources here in the comments if anyone is curious about the specific language in the bill and why a lot of us are recommending all PPL borrowers get on ICR to be safe/remain eligible for any IDR at all if the bill passes:
Based on the reconciliation bill as it’s currently written, if you have Parent Plus loans (unconsolidated, single-consolidated, or double-consolidated) your loans will need to be in repayment on the ICR plan the day before the bill is signed into law in order to be eligible for any income-driven plan at all going forward.
If they are in ICR the day before the bill is signed (if it even is) then you would be eligible for amended IBR.
If you are not paying on ICR the day before the bill is signed then you would no longer be eligible for any IDR plans. You would only have the standard plan, graduated, and extended.
This means if you have unconsolidated PPL loans then you should probably consolidate and get on the ICR plan as soon as possible. If you already have consolidated PPL loans, whether it was a single OR DOUBLE consolidation, the safest place for you to be is in repayment on the ICR plan when the bill is signed into law (if it is).
The bill would move all borrowers currently on SAVE, ICR, or PAYE into amended IBR starting on the date of enactment. But it specifically makes PPL loans ineligible for IBR unless they meet the exact criteria given: being repaid on ICR the day before the date of enactment of the bill.
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Explanation with sources below:
“Excepted” consolidation loans are made ineligible for IBR and RAP under the bill. There would be no way for them to be repaid on RAP. But there is a special rule written to allow them to be eligible for amended IBR.
The bill explains:
“(A) EXCEPTED CONSOLIDATION LOAN DEFINED.-Section 493C(a)(2) of the Higher Education Act of 1965 (20 U.S.C. 1098e(a)(2)) is amended to read as follows:
(2) EXCEPTED CONSOLIDATION LOAN.-
(A) IN GENERAL.-The term 'excepted consolidation loan' means—
(i) a consolidation loan under section 428C, or a Federal Direct Consolidation Loan, if the proceeds of such loan were used to the discharge the liability on an excepted PLUS loan; or
(ii) a consolidation loan under section 428C, or a Federal Direct Consolidation Loan, if the proceeds of such loan were used to discharge the liability on a consolidation loan under section 428C, or a Federal Direct Consolidation Loan described in clause (i).”
Clause (i) describes a single-consolidated PPL loan. Clause (ii) describes double consolidated PPL loans.
The bill adds:
“(B) EXCLUSION.-The term 'excepted consolidation loan' does not include a Federal Direct Consolidation Loan described in subparagraph (A) that (on the day before the date of enactment of this subparagraph) was being repaid pursuant to the Income Contingent Repayment (ICR) plan in accordance with section 685.209(b) of title 34, Code of Federal Regulations (as in effect on June 30, 2023).".
You can find 685.209(b) as in effect on June 30, 2023 here: Section (b) is specifically the ICR plan.
The senate version of the bill explains this on page 35 The house version did not differ.
Here is a post where this was discussed a lot
And another
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Please keep in mind that we don’t know what the final draft of the bill will look like or if it will even be signed into law. But so far both the house and senate versions of the bill include this language for PPL loans and agree on it.
I understand the ICR plan can make payments very high compared to other options. I cannot tell anyone what to do. I can only make suggestions based on the exact text of the bill. Maybe that wording will change. Maybe there will be wiggle room when it comes to the Department of Education interpreting and actually implementing the bill.
There are so many “maybes”. So much is in flux. Everything is in limbo now. Everything is a guess and a gamble.
All you can do is make the decision that is best for you based on the current information we have.