IDR Process Updated This Week
The IDR online application is back up, though a demo revealed there are some big new restrictions on enrollments:
- No enrollment in SAVE
- No opportunity to request enrollment in the plan with the lowest monthly payment
- No new enrollments in PAYE (ok for those already enrolled)
- No new enrollments in ICR except parent plus (those already enrolled can stay enrolled)
So as expected, IBR was Congressionally passed back in 2009 and will continue. We expect IBR applications to resume processing soon. You may want to apply for IBR or forbearance to avoid negative credit reports and other effects of default if you received a large bill. Talk with us if you would like more information on options to reduce an IBR payment, how IBR works including the forgiveness aspect, or another program such as a TPD discharge or bankruptcy discharge.
FSA also updated the IDR Court Actions page which has detailed guidance on recertifications.
You will note that the FSA has updated their announcement page to state that, as of March 26, 2020, eligible borrowers can apply online for IBR, PAYE, or ICR. We believe that PAYE and ICR are only available to people who were previously enrolled. A special exception is made for those who have Parent Plus loans. Congress has stipulated that consolidation of a Parent Plus Loan at any time will allow someone to enroll in ICR. The Rule allows someone who has a Parent Plus loan the option to bypass ICR by completing a double consolidation before July 2025. We don’t think anyone will be able do this in the future as there is no time to complete a dual consolidation and servicers are not processing them. We hope that ED’s 2023 Rule will allow those who already completed a dual consolidation to enroll in IBR. (Not SAVE, as it is still under an injunction and is not expected to survive.)
