Module Number 7 0 Calculated IDR Payments Paul
Module Number 7 $0 Calculated IDR Payments Paul S. Garrard Founder and President, PGPresents, LLC Independent Student Loan Consulting Spring 2021 PGPresents, LLC - All Rights Reserved
Why $0 payments? • Helps with cash flow as you start residency • You might need $0 payments on federal loans to free up funds to pay consumer debts and private loans • $0 calculated payments on income plans count towards PSLF*, assuming other requirements met * Public Service Loan Forgiveness
IDR payment calculation • Formula looks at income and family size* • Income used in calculation – Prior year income from most recent tax return, or … – Current income if either • No return filed in either of past two years, or … • Current income has significantly decreased from last reported income * Formula includes comparison to families living in poverty in your state
How to get a $0 payment 1. File a return for the 2020 year, even if income was $0 – Formula looks at prior year AGI* 2. If you did not file a return in either of prior two years, consolidate right after school but before residency – Answer current income question that you are not currently working * Adjusted Gross Income
Reminders • $0 calculated payments on income plans count towards PSLF, assuming other requirements met • $0 payments do nothing to help pay down your debt • Payments on income plans are good for 12 months • This is different than forbearance
Reminders • Married borrowers may not see $0 payments (depends on spousal income) • $0 means ZERO (no payment required) • Your loan servicer determines your payment amount, but based on a federal formula
END OF MODULE 7 PGPresents, LLC Independent Student Loan Consulting www. PGPresents. com 2021 PGPresents, LLC - All Rights Reserved
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