IBR payment almost quadrupling to nearly $2,000 per month in September... any recs for private student loan refinancing companies?
TLDR: Any tips on when to move from an IBR plan to a standard repayment plan and/or refinance loans? Monthly IBR payment going from $564 to $1,900. Standard repayment option is $1,700 at 6.9%. Great credit.
I want to start by saying that I fully recognize that I am among the lucky top third of earners in the U.S. with a 6-figure salary. I used to think I could stay on IBR for 25 years, get my balance forgiven, pay the taxes, and move on. But now my IBR payment is larger than the standard payment plan option.
My principal loan balance from undergrad + law school is $168K. Graduated from law school in 2013. Had 6 months of deferment then consolidated all my federal loans and enrolled in the IBR plan. My payments were $0 for a while, then slowly creeped up to $564 a month after my income increased. I last had to recertify my income in fall 2019. Since then, my income went up substantially, I got married, we started filing our taxes jointly, and we moved to Los Angeles. The move came with a big raise but also a huge cost of living increase.
Now I have to recertify my income by mid-July, or my monthly payment will go up to $1,962 starting in September. If I do this, my "end of payment balance" will be $88K. I am 13 years into the IBR plan and have roughly 12 years left before the balance will be forgiven.
Alternatively, the standard repayment plan option is $1,741 a month for 20 years. I'll pay off the loan, but per the application, I will have paid a total of $424,777 at that time.
My current interest rate is 6.9%. Not a single payment I've made over the last 3 years has gone towards principal. It has all been interest (and not high enough to even cover the accrued interest for each billing period. I also have been able to repair my credit and get my credit score over 800. Is now the time to get off IBR and refinance?
Edit: the standard repayment plan option through FedLoan is for 20 years, not 10. So far it looks like I can refinance with Sofi at around 5% interest with monthly payments of $1,500 for 20 years. That looks like the best option so far.