Your Student Loan Questions Answered: SAVE, IBR, PAYE, PSLF, and Parent PLUS Loans

I am in the SAVE forbearance and need to pick a new plan to get the 1% autopay discount. What should I do?

If you are having to pick a plan by the end of September (or even sooner), just pick the plan, get the autopay discount, and get moving. Even if you choose an Income-Driven Repayment (IDR) plan like IBR, the 1% discount will save you on the "tax bomb" by saving you at least $700 or so over a couple of years, even if it doesn't change your monthly payment.

I applied to switch from SAVE to IDR. How long will the processing take?

On average, for 70 to 80% of folks leaving the SAVE plan, it is taking about two to three weeks to process and get enrolled in a new repayment plan. Some process as quickly as 24 hours, while outliers can take over a month.

How do I ensure my income is accurate for repayment plan calculators?

Make sure you use the exact income information from your tax returns. Don't just "guesstimate" what you feel you make. Get the tax return you filed in April, look at line 11 for your Adjusted Gross Income (AGI), and use that exact number.

Which plan is best to pick if I have a Parent PLUS loan?

If you have consolidated the Parent PLUS loan, you can access Income-Contingent Repayment (ICR) today, and then roll into IBR or the Standard plan. If you have not consolidated, your only option is the Standard plan.

I need a college loan, but my parents refuse to co-sign and I have no credit. What can I do?

You always have the federal student loan option, which doesn't require a co-signer ($5,500 for a freshman, $6,500 for a sophomore, $7,500 for juniors/seniors). However, if you are a freshman, it is very unlikely you'll get a private student loan without a co-signer because one-third of freshmen don't finish college, making it too risky for lenders. You need to have a candid conversation with your parents or choose a cheaper pathway, like community college, which can be fully covered by federal loans and grants.

I have an unconsolidated Parent PLUS loan on the Standard plan and was just laid off. Is there anything I can do?

If you did not consolidate prior to June 30th, you unfortunately do not have any income-driven options (where an income of zero could equal a $0 payment). Your only option is to apply for a deferment or forbearance by stating you are unemployed to get a break on the payments. Just know this will not stop the loan balance from growing.

If I get kicked off SAVE and just lost my job, should I file for more forbearance?

Losing your job is actually the absolute best time to choose an IDR student loan repayment plan. Do not keep doing forbearance and making things worse for yourself. Apply for IBR or PAYE today. Provide a letter as your income documentation stating you are currently unemployed. Your payment could drop to $0 (IBR) or $10 (PAYE) a month for the next 12 months. This keeps you making progress without your loan balance growing out of control.

Should I accept work-study financial aid even if I don't plan to use the funds?

Work-study is what I call "fake aid." Accepting it doesn't mean money gets deposited into your account to pay your initial tuition bill. You actually have to apply for an on-campus job, get hired, work the hours, and then you get paid in a regular paycheck. You can often get paid more and more consistently by just getting a job off-campus in your college town (like at Chick-fil-A or Walmart).

I have the money to pay off my student loans, but I don't want the money going towards defense. What should I do?

Just pay off your student loans. Do not make dumb financial decisions because of things you cannot control. Refusing to pay will put you in collections, ruin your credit, and turn a $20,000 balance into a $30,000 problem. Your $20,000 makes no impact on the government, but paying it off significantly benefits your individual financial life.

I applied for consolidation 2 weeks ago to get out of default and picked PAYE. Do I just wait?

Yes, consolidation takes 45 to 60 days on average. Once consolidated, you enroll in the billing cycle, and your first payment will be due about a month after that.

Do IDR plans go away in July 2027?

No, IDR plans continue to exist forever. Congress made a new IDR plan (PAYE) that just started on July 1st. Two old IDR plans (the original Pay As You Earn and ICR) will stop accepting new enrollments on June 30th, 2028, but the general IDR options are not going away.

Does married filing jointly work for IDR calculations if I have zero income but my spouse works?

Yes, but you have to report both of your incomes. Filing jointly tells the government you are working jointly on these loans as a unit, which gives you massive tax breaks. It will still give you a lower payment overall because your personal income is zero.

Can I be on PAYE if I have zero income?

You absolutely can, but realize that the PAYE plan has a minimum required payment of $10 a month, even if your income is zero. If you can't afford the $10, IBR can get you a $0 payment.

What is going on with repayment calculations? My servicer is giving me different payment amounts.

The backend processing involves multiple organizations, and things get screwed up. First, run a student loan calculator using line 11 (AGI) from your latest tax return to know exactly what you should be paying. If your servicer's bill is off by a few dollars, it's a rounding error. If it is hundreds of dollars off, go to studentaid.gov and submit a "Reconsider my income-driven repayment plan payment" request.

Can I ask the school for more financial aid if I still have a net cost?

You can always appeal your financial aid award. However, understand that federal and state grants are set by law and won't change. The university has discretion over its own scholarships and grants, but they do not have to give you any more money. It never hurts to ask, but don't expect it.

How long does it take to approve an IBR application?

We are seeing about 70 to 80% of folks getting approved in two to three weeks. Some process in 24-48 hours, and some outliers take over a month. If it takes longer, they will usually put you in a temporary processing forbearance.

Is "Borrower Defense" a good way to get my loans forgiven?

Borrower Defense is valid if you were actually defrauded by your school (mostly for-profit schools). Simply attending a school does not mean you were defrauded. You must have proof of material misrepresentations or legal violations. Be very careful with predatory services on TikTok or Threads charging to help you file these. Most applications are denied, and going into forbearance while waiting for a result can put you in financial trouble if your claim isn't valid.

Should I consolidate my loans while in school so I can enter repayment early and start the forgiveness clock?

You cannot enter repayment while in an "in-school" or "in-grace" status. The only way to force it is by consolidating your student loans, but you should absolutely not do this.

I have 162 out of 120 PSLF payments. How do I get them discharged?

That is a red flag. The system automatically processes discharges once you hit 120 payments. If you are showing 162, something is wrong. You need to make sure you actually have Direct student loans, were on a qualifying repayment plan, and that you've correctly certified your employment for all 10 years.

Would you recommend PAYE over IBR for someone with zero income who doesn't qualify for PSLF?

If you can swing the $10 minimum monthly payment, PAYE is highly recommended. It offers interest and principal reduction subsidies, meaning your loan balance will never grow and will actually decrease. If you can't afford $10, IBR gets you a $0 payment.

I'm waiting to hit my 120th PSLF payment in May and then want to quit my teaching job. Do I have to be working while applying?

Yes, you must be working for a qualifying employer when you apply. Once you make your 120th payment in May, submit your final employment certification form a few days later. Once the tracker hits 120, you should see your loans discharged about 6 weeks later (likely by the end of June), allowing you to safely leave the job before the next school year.

Should I rely on the PSLF "buyback" option?

PSLF buyback is incredibly complicated and often not helpful. You can't even apply for it until you reach 120 months. Furthermore, they charge you based on your actual tax return for the specific calendar year you are trying to buy back. If your income increases in the future, buying back those months will cost you more money than just enrolling in an IDR plan today and making payments based on your current (lower) tax return.

Will a Pell Grant cover my master's degree?

No, Pell Grants are only for undergraduates. You need to be very careful taking out loans for a master's degree. 50% of the time, master's degrees hurt people financially rather than helping them. Unless your employer is paying for it, make sure you have a clear pathway to a positive return on investment.

I have a Parent PLUS loan and was just diagnosed with cancer. What are my options?

First, I'm very sorry to hear that. If you have consolidated your loan, you can access IBR and potentially get a $0 payment. If you have not consolidated, you only have the Standard plan, but you can request a specific cancer treatment deferment so you do not have to make payments during this time.

On the PAYE plan, do you really accrue no interest at all?

Your loan still accrues interest, but PAYE forgives the unpaid interest every single month. If your payment is $200 but the loan accrues $500 in interest, you pay $200 and the government waives the other $300. Additionally, they give you a $50 principal reduction subsidy, so your balance actually goes down.

I owe $30k a year for my bachelor's degree. Should I get a private loan without a co-signer?

You are paying way too much money for a bachelor's degree. An employer will not pay you more simply because you spent $100,000 on your degree compared to someone who paid zero. Do what you have to do to cover the current semester (federal loans first, then private if needed), but you should strongly consider transferring to a cheaper community college or local state school so you don't ruin your finances for the next 20 years.

Should I consolidate my old student loans with my new ones for PSLF?

Do not consolidate your student loans anymore! If you consolidate, your new loan will take a weighted average of your payment counts, meaning you will lose the high payment counts you already earned on your older loans. Additionally, if you consolidate after July 1st, you will lock yourself out of everything except the PAYE plan. Let each loan get forgiven on its own timeline.

My daughter is a mental health counselor. She doesn't make enough to pay her loans, but her deferment ended. What should she do?

She needs to get on an Income-Driven Repayment plan (IBR or PAYE). This caps her payment at around 10% of her discretionary income. If she wants to lower that payment further, she should contribute to pre-tax retirement accounts (like a 403b or Traditional IRA), which lowers her Adjusted Gross Income, thereby lowering her student loan payment and maximizing her eventual loan forgiveness.

Do kids have to pay taxes on scholarship money?

Potentially. If the scholarship money is used for direct educational expenses like tuition, fees, books, and supplies, it is not taxed. If the scholarship money is used for room and board, it is considered taxable income.

Instead of my son taking out loans, should I cash out my annuity to pay for his college?

No. As a parent, you need to take care of yourself and your retirement first. Do not jeopardize your own financial future, because you'll end up struggling at age 65 and relying on your son to support you. Have him take out federal loans, do not overpay for the school, and ensure both of you are financially secure long-term.

I developed an unforeseen medical issue and am permanently disabled. Do I need a lawyer to get a disability discharge?

No, you do not need a lawyer. Go to studentaid.gov and fill out the Total and Permanent Disability (TPD) Discharge form. You will need a doctor's note stating you are permanently disabled, and the review period must explicitly state that the disability will last for five years or more.

I have 112 PSLF payments. I was told to switch to the Standard plan for the last 8 payments and wait until 120 to certify my employment. Is this right?

Do not do that. Switch to an IDR plan (like IBR or PAYE) to make your final 8 payments. More importantly, do your employment certification form now and every year. If you wait until you hit 120 to certify 10 years of history all at once, it requires a massive manual review and takes months, and older employers might not even have your records anymore.

I work for a non-profit, but they outsource their payroll to a for-profit company like ADP or Gusto. Do I still qualify for PSLF?

Yes. Every payroll company is for-profit. They just work for your employer. Use the Employer Identification Number (EIN) from your W-2 to verify the actual non-profit organization you work for.

I consolidated a Parent PLUS loan on July 1st for the "double consolidation loophole" but can't apply for IBR yet. Why?

You can't apply for IBR right away. You must first consolidate, apply for ICR (Income-Contingent Repayment) online, and make one billing cycle payment on ICR. Only after you are successfully in the ICR plan can you use a paper application to step into IBR.

If I come into a small amount of money before filling out the FAFSA, what should I do with it?

If it's a small amount (like $2,000) in a checking account, it won't seriously impact your financial aid. If it's a large amount meant for school, put it in a 529 plan. Keep in mind that the government expects you to pay for your own college if you have the financial means to do so.

How can I check my exact Qualifying Payment Count for PSLF?

There is a backdoor to check this. Log into studentaid.gov, go to the "My Aid" section, and download your Aid text file. Use Ctrl+F to search for the phrase "Qualifying Payment Count." You'll see the exact count listed under each individual loan.

I don't work, but my husband is a high-income earner. Will his income count against my IDR payment?

If you file your taxes as "Married Filing Jointly," his income will be used to calculate your student loan payment because you are telling the government you operate as a single financial unit. You can file "Married Filing Separately" to exclude his income, but your overall household tax bill will likely be significantly higher. Do the math to see which saves you more money overall.

I was told my Graduated Extended repayment plan does not qualify for PSLF. Is that true?

Yes. The Graduated Extended plan is not an eligible repayment plan for PSLF. (It only temporarily counted under expired COVID waivers). You need to switch to an Income-Driven Repayment plan (like PAYE or IBR) immediately to start earning qualifying PSLF payments.