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Switching from IBR to Standard repayment doesn't reset years?

Started by 2mkb1, September 06, 2019, 07:27:29 am

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2mkb1

I am considering switching to standard repayment for my direct consolidation loans after being on IBR since 2013. My current balance is 24000.
I expected to be able to do the 20 year standard for consolidation loans but Mohela says since the loans were consolidated in 2009 my repayment plan on standard will only be for 10 years since 10 years are already up.
Does that sound correct? I asked at studentloans.gov and was told to talk to mohela.
It looks like I can consolidate my subsidized and unsubsidized loans now and if I do that, would it allow a new 20 year payment plan?
I'll probably just keep the 10 year plan now anyhow, and try to squeak out the extra 100 a month, but I want to know all my options.

TheCollegeInvestor

I'm confused on the ask here.

What loans do you have? Are you considering re-consolidating again?

The standard 10-year plan pays off your loan balance in the 10 year period of time, and it's typically the plan with the highest monthly payment.

There are different 20 year options - the extended plan, which pays off the balance in full by the 20 year mark. There is also the income-driven plans, which you may be on one already. Those give you forgiveness of any remaining balance at 20 or 25 years based on your loans.

2mkb1

For a direct consolidation loan the standard repayment is 10 to 30 years depending on the amount of the total loan debt, if you owe between 20000 and 40000 the standard repayment plan is 20 years. I thought that if I switch to that plan I would have the whole 20 years but Mohela says because I used 10 years already since I consolidated I can only have another 10.
so I am asking if that's correct that I really can't have the whole 20 years if I switch to the standard plan?
I also want to know that if I do consolidate the subsidized and unsubsidized to loans together then could I have the whole 20 years to repay?
Thanks for your help!

TheCollegeInvestor

When you say "standard plan", that isn't 20 years. That's the Extended plan: https://studentaid.ed.gov/sa/repay-loans/understand/plans/extended

IBR, which you said you're on, can also be 20 years.

If you consolidate, you reset the clock on IBR, but that's a foolish move because any balance on your loan is forgiven at the end of the repayment term. See this: https://thecollegeinvestor.com/11856/secret-student-loan-forgiveness/

I think you should check your NSLDS file, make sure you understand exactly where you stand with your loans, and always realize when you speak to a representative at your loan servicer, they are simply a call center employee - not a financial planner. They will try to answer your question, but if you don't ask it correctly, they will likely give you information that isn't helpful.