You must have heard about the REPAYE or Revised Pay As You Earn Repayment Plan. Basically, it is a newly launched Federal Repayment Plan. Unlike the previous plan, this new plan is based on how much money you earn making things simple for you. As you know that previously payments were made at 15% but now, after the launch of REPAYE, you can make payments at 10% of your income.
But, still, there is a lot that needs to be done. For instance, if you talk to a borrower, the very first thing he will tell you is the long waits for REPAYE processing with MyFedLoan. This is not it there are a number of other issues that a borrower needs to be ready to face when processing with MyFedLoan.
Let’s talk about the process first. Interested borrowers are required to submit paperwork as well as income verification. There is a way to make this process fast and efficient. If you are a borrower, you can have your information sent directly from the IRS to MyFedLoan. Once MyFedLoan has the necessary information, calculating payments will be only a matter of minutes. This is how a process that takes months to complete can be completed in minutes.
What Actually Happens
You will be surprised to know what actually happens. Servicers like MyFedLoan take too long to process the information and calculate the payments. These long delays cause a lot of problems and a number of borrowers are placed in an “administrative forbearance”.
Borrowers are facing the problem because the process is too long and costs them a lot of money. One big problem is that interest keeps accruing no matter you are unable to make payment according to your new payment plan. This is a serious problem if you are working on student loan forgiveness. For instance, not making a payment for a month means you need to worry about another month that will be added to the end of your forgiveness calendar.
You will agree that the people at MyFedLoan know the system very well. They can give valuable advice on how to improve the system. You will not believe that getting a bill issued has become a major problem. Having correct information sent to the credit bureaus is not easy. MyFedLoan doesn’t have $5 to pay for the post. In this way what should have been done in minutes takes months. In addition, when the correct information is not sent to the credit unions, it will make the situation even worse.
What to Do Then?
If income driven payments become the default payment plan for borrowers like you and many others then it will be great. And this is also what former President Obama wanted. We live in the world of automation and it will be a big thing if the process of determining the eligibility is automated. Your income and students loan balance is required for evaluation. If the system is automated, it will save a lot of time and money of borrowers like you.