Mike Davies
June 2016

What you need to know about REPAYE – Video

Student loan debt forgiveness, repayment plans, and other resources

REPAYE stands for Revised Pay As You Earn and has been praised for being a useful commodity of the US federal government for people who have taken out student loans for college. This program is different than PAYE, which stands for Pay As You Earn. REPAYE emerged as a more inclusive program that extends the option of income-based student loan repayment. This program is accessible to anyone who has taken out federal student loans at any point in their life. The Obama administration has discussed potentially using REPAYE as a universal program for all borrowers.

Here are some quick facts about the REPAYE program:

  1. There is a monthly payment cap of 10% of annual income for the household. This includes the spouse’s income, even if they file taxes separately from their partner.
  2. Monthly payments are based solely on annual income, so the “standard” repayment plan amount could potentially be exceeded.
  3. Undergraduate loans are forgiven after 20 years. However, graduate school loans are forgiven after 25 years.
  4. To avoid negative amortization, the government covers three years of accrued interest if the loans are subsidized. After that, the government will pay 50% of interest on subsidized loans.
  5. Through this program, the government contributes 50% of accrued interest on unsubsidized student loans. This helps keep amortization from inflating.
  6. Through the REPAYE program, access to Public Service Loan Forgiveness

(PSLF) is available to those who qualify. Graduates may now sign up for the PSLF program. This program grants forgiveness to borrowers who have served in public service for 10 years, including being involved in the Revised Pay As You Earn program.

The REPAYE program is an accessible government student-loan repayment plan that is available to borrowers who have taken our direct federal loans. This program has been helpful to individuals who are seeking debt forgiveness as well as affordable repayment plans that will not result in negative amortization and student loan default.

To seek out more information, or apply for this program, visit studentaid.gov for more details.

Ref and more about Revised Pay As You Earn Repayment Plam: https://smartasset.com/student-loans/all-about-repaye


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Mike Davies

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