SDM

SDM

       

 

 

Student Debt                   

Modifications

NEW PAY AS YOU EARN PROGRAM

REPAYE: New 10% Plan for ALL Direct Student Loan Borrowers Goes Online Next Month

The U.S. Department of Education has issued final regulations creating a new income-driven repayment (IDR) plan. Called Revised Pay As You Earn (REPAYE), it improves on existing plans in key ways. When REPAYE becomes available in mid-December, all borrowers with federal Direct student loans will be able to cap their monthly payments at 10% of their discretionary income, regardless of when they borrowed or their debt-to-income ratio. REPAYE also limits interest accrual for borrowers with low income relative to their debt, treats married borrowers more equitably, and better targets benefits so that higher income borrowers pay the same share of their income as lower income borrowers.

Borrowers with only undergraduate debt will become eligible for forgiveness after 20 years of payments, but REPAYE requires those with any graduate school debt to pay for 25 years on all their loans.  Many of you joined TICAS and more than 2,400 concerned individuals and organizations

in urging that payments be limited to 20 years for all borrowers.  There’s bipartisan interest in streamlining multiple IDR plans, and this time-limit is something Congress can and should fix when it creates one improved plan.

View our simple summary chart of the 5 income-driven repayment plans, including REPAYE