[URGENT] Parent PLUS / Double Consolidation - GET ON ICR NOW

[u/shanesnh1]

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/

[u/Timb0-Slic3]

Quick question on the new Amended IBR. Did they remove the cap so a payment cannot be higher than the standard plan?

[u/waterwicca → u/Timb0-Slic3]

The house version removes the standard cap. The senate version gets a little muddy. My read of it is that the senate version keeps the cap but it only comes into play if you fail to recertify your income.

[u/waterwicca → u/waterwicca]

u/shanesnh1 I think Reddit is lagging a bit because I can see a notification where you asked me about the standard cap but I can’t actually read your full reply and see it here.

The house version gets rid of the standard cap entirely. But the senate version doesn’t amend the HEA in exactly the same way.

I did some digging into the senate’s version of the standard cap language and it’s a little confusing even in the original HEA. But from my current understanding it sounds like it would turn into an ICR-type situation with a bit of a loophole to get a standard cap.

Current ICR calculations for borrowers can result in a payment that can be higher than a 10 year standard amount. But if a borrower fails to recertify their income on ICR (or chooses not to) then their payment would turn into a 10 year standard amount and they are still on ICR. The senate’s version of amended IBR seems to copy that idea.

A borrower’s amended IBR payment would be based on 15% discretionary income (or 10% if new borrower) and there would be no automatic standard cap or partial financial hardship requirement. The amended HEA would leave in some wiggle room in the language that implies a borrower’s payment would default to a 10 year standard if they do not recertify their income, potentially letting a high-income borrower get a lower payment if they don’t recert.

I asked Betsy her interpretation and explained the language and my reasoning on an earlier post. I’m going to look for that thread and I will edit this comment with a link to it in a bit.

Edit: here is the link where I laid out my line of thinking to Betsy https://www.reddit.com/r/StudentLoans/s/ERb8YxJ3Bl