Great questions, Jeff. I have had the opportunity to look at some of the early drafts of the proposed changes, but before I answer your specific questions, I think it is important to point out a couple of items. First, we don’t have final language, and it will almost certianly change during the rulemaking process. Second, in Biden’s recent annoucement he made reference to terms that were not included in the early drafts.

Thus, at this point, the best we can do is speculate. When the opportunity for public feedback comes, we can get involved, but for now, I can’t give you anything definitive for planning purposes. Instead, I’ll give you my best guess.

As for your first question, based on the most recent announcement, I think you have a good shot at forgiveness for the accurred interest that caused your balance to grow so much. You may find that your balance is back to the original amount that it was when you graduated.

I don’t expect that the plan will parse out undergrad debt from graduate debt for forgiveness timing. Additionally, even if it did, I don’t know that it would help much for most borrowers. IDR payment are based on your income, not your loan balance. Thus, even if part of your balance is forgiven in year 20, the payments for the remaining 5 years would be the same. Your proposed change might help borrowers with a small amount of graduate debt, but in most cases that I’ve seen, the graduate debt dwarfs the undergraduate debt.

Finally, I haven’t seen anything about a special early forgiveness provision for seniors.

I’d encourage you to keep an eye out for the opportunity to leave public feedback, as I do think you propose some good ideas that merit further discussion.

Great questions here Mark.

First, family size includes your spouse IF you file taxes jointly. If you file seperately, your spouse is not included.

Community property states defintiely complicate things. This article breaks down the rules in community property states and provides some strategy tips.

Hi Terence,

There is a lot to cover here. First, I think your assessment that it is geared toward lower incomes is somewhat fair. If you fall at or around 225% of the federal poverty level, SAVE is a great deal. As you income increases you reach a point where the balance-based plans become more affordable than the income-driven plans.

You can apply for SAVE if you are married. If you file taxes jointly your spouse’s income is included in the calculation. If you file seperately, it is not included.

The one-time adjustment is supposed to happen this year. This article provides a full breakdown of what is supposed to happen, when, and how to qualify.

Also since I (we) live in a community property state, when we each file MFS, all the tax software now asks us to fill out the IRS Form 8958, but those instructions are vague and am I entering MFS amounts or MFJ amounts…..? and do any of these 8958 figures now count against us to raise our student loan repayment amounts?

That makes sense.

Signing up for SAVE requires the borrower to have a direct loan. Typically people with FFEL loans can consolidate into an direct consolidation loan to get eligiblity. Your situaiton is a bit confusing becuase you have a consolidation loan, but it isn’t a direct consolidation loan. (I say this based on the timeline, but I can’t say for certain without getting more details from you.)

The good news is that you can still consolidate into a direct consolidation loan, but the bad news is that you should probably make a decision before the April 30 deadline. The bad news is that direct consolidation may impact your interest rate. However, it could move you closer to your goal of getting a house.

The ideal approach for your situaiton will depend on your income, future plans, and several other factors. If you’d like, we can schedule a consultation and discuss things in more detail.

I started IBR in 2009 so I think I did then?

You may have an FFEL consolidation loan. Did you consolidate before 2010?