Borrower on SAVE/IBR/PAYE plan with high debt-to-income ratio, negative amortization risk, 20–25 year forgiveness horizon, and potential tax bomb.
SL-02 is the negative-amortization archetype: borrowers on SAVE / IBR / PAYE / ICR with high debt-to-income ratios, balances growing despite monthly payments, and a 20–25-year forgiveness horizon ending in a potential IRC §108(f)(5) sunset tax bomb.
SL-02 exists because Income-Driven Repayment is the most numerically misbehaving repayment path in the federal student-loan system and most products handle the negative-amortization and forgiveness-tax surfaces incorrectly. IDR plans cap the monthly payment at a percentage of discretionary income (defined as AGI minus 150% FPL for SAVE/PAYE/IBR; 100% FPL for the old ICR), and for high-debt borrowers that capped payment is less than monthly accruing interest — the balance grows. SAVE introduced an interest subsidy that prevents balance growth when the IDR payment doesn't cover interest, but the SAVE plan is partially enjoined as of mid-2025 and borrowers have been placed in administrative forbearance that does not count toward forgiveness. Forgiveness arrives after 20 years (PAYE, IBR-new, SAVE undergraduate) or 25 years (IBR-old, ICR, SAVE graduate) of qualifying payments, and the tax treatment is the recurring trap: IRC §108(f)(5) excludes forgiveness from gross income only through 2025, after which the pre-ARPA rule returns and forgiveness becomes ordinary taxable income — the 'tax bomb' that can produce a five- or six-figure tax liability on a forgiveness event the borrower expected to be costless. Annual income recertification under 34 CFR §685.221(e) is the ongoing servicing surface, and capitalized interest on plan switches or recertification failures can permanently raise the principal.
The structural story is a young household carrying a high debt-to-income ratio: median income $63k against an embedded student-loan balance that pushes effective DTI well above mortgage-underwriting thresholds. Median net worth ($79k) and median liquid net worth ($36k) are thin. Every household carries credit cards plus student loans; mortgages appear in only 5 of 12. The cash-flow story is the recertification cycle: each year's AGI determines the next year's payment, which makes income-smoothing strategies (Solo 401(k) contributions, HSA contributions, charitable bunching) directly affect the IDR payment.
SL-02 differs from SL-01 (PSLF candidate) by the absence of qualifying public-service employment — the long-horizon tax-bomb forgiveness applies rather than the tax-free 120-payment PSLF event. From SL-03 (Parent PLUS) it differs by being the borrower on the borrower's own debt. The diagnostic is the IDR-plan + negative-amortization + 20/25-year-forgiveness-horizon + tax-bomb-risk combination.
Aggregated across the 12 SL-02 households in the shipped v3 corpus corpus. Numbers describe the corpus, not population claims.
Charlotte and Sebastian are a young dual-professional MFJ household whose combined gross income of $63k against $30k of total liabilities looks healthy until the unfunded education-funding goal of $1.09M and a $1.39M retirement target sit alongside an SL-02 student-loan IDR payment that resets annually with AGI. The diagnostic is that retirement-account contributions (which reduce AGI and thus the IDR payment) interact with the savings goals in counterintuitive ways: contributing to a traditional 401(k) lowers the IDR payment in the short run but also slows debt paydown, which under a non-PSLF posture extends the negative-amortization horizon. Debt payoff is on track because the IDR cap covers it; the home-purchase goal is off track because the embedded student-loan DTI blocks mortgage qualification under QM/ATR.
Every SL-02 household ships with — at minimum — these JSON fields populated. The full schema is documented in the data set you purchase.
Student-loan servicers and refinancing platforms use SL-02 to test IDR plan comparison engines, SAVE-versus-PAYE-versus-IBR break-even modeling across the 20/25-year forgiveness horizon, and the recertification-failure capitalized-interest path. Tax-software platforms use it for IRC §108(f)(5) forgiveness-tax treatment in the post-2025 reversion regime, including state-level non-conformity (some states tax federally excluded forgiveness, some federally taxed forgiveness is state-excluded). Mortgage origination platforms use SL-02 for the IDR-payment-as-DTI-input under GSE Selling Guide rules (Fannie permits documented IDR payment; Freddie requires 0.5% of balance if IDR payment is $0) — a recurring source of underwriting disputes. Personal-finance-coaching products and IRS-VITA-class tooling use SL-02 for the income-smoothing strategy where 401(k) and HSA contributions directly lower the next year's IDR payment.
SL-02 borrowers are explicitly not on PSLF — if the household has qualifying public-service employment, reach for SL-01. Parent PLUS borrowers (whose IDR access is restricted to ICR without a double-consolidation workaround) belong in SL-03. Private student-loan-only borrowers are not eligible for federal IDR at all and are not represented here; their refinancing and forbearance options sit in a different regulatory frame outside the §108(f) tax-treatment regime. Borrowers in active default with collections (administrative wage garnishment, Treasury offset of tax refunds) are not specifically over-sampled — the post-default Fresh Start program rehabilitates these borrowers back into IDR eligibility but the workflow surface is distinct. Discharge under Total and Permanent Disability or Borrower Defense to Repayment is a separate path that overlaps HC-02 territory.
Income and student-loan-balance bands during v3 synthesis were anchored to Department of Education Federal Student Aid IDR portfolio summary statistics, NCES Baccalaureate and Beyond longitudinal study data, and the CFPB Student Loan Servicing Annual Report. Age concentration (median 31) reflects the early-career IDR population. Per CLAUDE.md §9 the v3 corpus is FROZEN — priors above describe synthesis intent rather than auditable distribution fits. SAVE plan formulas and the §108(f)(5) sunset behavior reflect the statute as enacted; live litigation status and any post-sunset legislative extensions are policy state not pre-baked into the household records.
SL-01 is the PSLF candidate with qualifying public-service employment, 120-payment horizon, and tax-free forgiveness under IRC §108(f)(1). Use SL-01 when PSLF tracking is the diagnostic.
SL-03 is the Parent PLUS borrower — IDR-access is restricted to ICR only without a double-consolidation workaround. Reach for SL-03 when the borrower is the parent rather than the student.
MB-01 is the first-time homebuyer where the IDR-payment-as-DTI-input under GSE Selling Guide rules is part of the underwriting test. Use MB-01 when origination is the surface; SL-02 when servicing and forgiveness modeling are.
F-01 is the new-graduate tech worker on the 10-year Standard plan with rapid principal reduction. Use F-01 when the borrower has chosen accelerated repayment rather than IDR forgiveness maximization.
SL-02 — Income-Driven Repayment Enrollee represents borrowers on SAVE / PAYE / IBR / ICR with high debt-to-income ratios, monthly payments capped at a percentage of discretionary income, and a 20- or 25-year forgiveness horizon. It is the archetype for negative-amortization modeling, SAVE-subsidy logic, IDR-payment-as-DTI testing, and IRC §108(f)(5) post-2025 forgiveness-tax-bomb projection.
The 12 shipped SL-02 households have a combined gross income median of $62,774 (25th–75th: $56,671–$71,650). Median net worth is $78,856 with $36,209 in liquid net worth — typical of early-career borrowers carrying student-loan balances that exceed annual income.
The household profiles support modeling of SAVE's negative-amortization subsidy and the subsidy-loss behavior during the partial-injunction administrative forbearance, but specific SAVE-versus-PAYE plan elections are downstream attributes rather than pre-baked corpus fields.
SL-01 borrowers work at qualifying 501(c)(3) or government employers and are on the 120-payment PSLF horizon with forgiveness tax-free under IRC §108(f)(1). SL-02 borrowers lack PSLF eligibility, face the 20- or 25-year general forgiveness horizon, and confront a potential tax bomb under the §108(f)(5) post-2025 reversion regime.
Yes — the corpus is structured to surface the GSE Selling Guide divergence on IDR-payment treatment: Fannie permits documented IDR payment as the DTI input, Freddie requires 0.5% of loan balance if the IDR payment is $0. This affects mortgage qualification for SL-02 borrowers more than any other archetype.
No. The shipped v3 corpus is frozen and not regenerable from current code (drift confirmed 2026-05-09). Improvements land in a future v4 release with per-archetype golden fixtures in CI.
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