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Great news for Federal Student Loan borrowers as a new payment plan is available and could be beneficial.  The REPAYE (Revised Pay As You Earn) student loan repayment plan is the newest repayment plan available by the Department of Education.  REPAYE is another income-driven repayment plan which can be helpful for some student loan borrowers.

As of December 17, 2015 the REPAYE Plan will be available for direct federal student loans that qualify.  The REPAYE plan is a revised version of the PAYE (Pay As You Earn) Plan which is also an income driven repayment plan.

There are multiple income driven repayment plans available for certain student loan borrowers who qualify.  Basically these programs are offered to help borrowers pay back student loans at a more reasonable rate based on AGI, family size, loan debt and other factors.


How is REPAYE helpful?

  • Allows federal borrowers to cap their payments 10% of their discretionary income monthly
  • Unlike PAYE it does not matter the date the loan was obtained in order to qualify
  • Remaining Federal Student Loan debt is forgiven after 20 years
  • Eligible repayment plan for Public Service Loan Forgiveness (PSLF) Program


More Information on REPAYE

Undergraduate student loan borrowers with the REPAYE  plan have to make payments for 20 years and then the remaining balance is forgiven.  Graduate student loans are required to be paid for 25 years before the balance is forgiven.

Federal student loan borrowers who have a high income could pay more than the 10 year standard repayment plan.  Whereas income driven repayment plans such as IBR or PAYE cap their monthly payments to never exceed the Standard Repayment Plan.

REPAYE program helps for student loan borrowers whose payments don’t exceed the interest for that month.  REPAYE limits the amount of possible interest accrued more so than IBR and PAYE.


REPAYE Conclusion

It is nice to see the Department of Education add another Income Driven Repayment Plan.  The REPAYE in some cases is best repayment program for student loan borrowers.  Other income driven repayment plans should be compared, along with the current student loan borrowers situation to find the best repayment plan.  The fact that another income driven repayment plan has been added, makes the possibility of saving more money greater for borrowers.


Written by:
Student Loan Repayment Consulting Staff



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