Are you “on track” with your student loan plans?

A month ago we celebrated the new year—a time to make new plans and recommit to old ones—how are you doing with those? More specifically, when was the last time you checked to make sure you were “on track” with your student loan plans? Many borrowers treat it like their Crockpot: “set it and forget it,”* only thinking about them when it’s time to check on their IDR plan. Loan servicers, on the other hand, are thinking about your loans all the time. If you miss your income recertification, they’re not going to miss the opportunity to eke more money out of you.

Don’t “set it and forget it”

We recently encountered this situation with our client Dr. Dominic, who graduated from medical school in 2017. With a mountain of Direct Loans—the kind that qualify for PSLF—he applied for REPAYE (a qualifying repayment plan), then “set it and forget it,” putting them on autopay with his bank. When he finally got around to checking on his loans over a year later, he thought he was still under REPAYE. His loan servicer, however, moved him to a different student loan plan because he missed his annual income recertification deadline. They switched him over to the “post revised pay as you earn alternative plan,” which does not qualify for PSLF but sounds awfully similar. Dr. Dominic lost a couple months worth of qualifying payments towards the 120 needed for forgiveness because he assumed he was on the right plan when he wasn’t, but it was an easy fix to get back on track once we helped him check on his status. “I guess they just figured I wouldn’t catch on that I wasn’t on the right plan, and they were right … I’m so glad I called and you were able to help me straighten everything out!”

If you forget you left your Crockpot on, you can scorch your soup; annoying, but not the end of the world. With your finances, that approach can have more dire consequences. Remember to check on your student loan plan at least annually. And when you need another cook in the kitchen, give us a call to make sure you’re on track with PSLF.

*Although some of us would remember that phrase actually originated with the Ronco Showtime Rotisserie Grill.