Calculating REPAYE Monthly Payment


By Weston Manley
March 31, 2020




A few weeks ago, one of my clients sent me his updated REPAYE monthly payment (He’s going for PSLF).   After comparing it to my calculation, I believed he was going to be charge $55 more than he should have.  

Given I am an authorized user on his FedLoan account, I called them to discuss the issue.  They confirmed my calculation with the numbers I provided and requested I call back with the borrower to request a recalculation.

A few days later, I called back with the borrower.  My first question to the income driven plan specialist was for the inputs used to calculate the monthly payment.  She told me they can no longer provide that information (new to me) and that I needed to speak with a supervisor.   After another 15 minutes of waiting, we finally spoke to a supervisor who was able to go through my client’s Income Driven Repayment application.  Come to find out, he mistakenly selected that he didn’t have access to his spouse’s income thereby reducing the household size by one equating to a $55 increase in the payment.

Moral of the story, it’s important to understand how your IDR payment is calculated.  $55 may not seem like much but if he continued to make the same mistake over time, the aggregate amount may have been significant especially with the end goal of loan forgiveness.

WM


Weston is a Certified Public Accountant, Certified Financial PlannerTM, and holds the Chartered Financial Analyst designation. Weston earned his master’s degree in accountancy from the University of Missouri – Columbia. Weston is active in the St. Louis community and board member of the Anti-Defamation League.

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