Comparing Income-Driven Repayment Plans
There are now five different income-driven repayment plans: Income-Contingent Repayment (ICR), Income-Based Repayment (IBR), Pay As You Earn (PAYE), Income-Based Repayment for New Borrowers (New IBR), and now Revised Pay As You Earn (REPAYE). Calculating Monthly Payments Income-driven plans calculate payments as a percentage of “discretionary income”. Discretionary income is defined as the difference between a borrower’s Adjusted Gross Income (AGI) and 150 percent of the poverty guideline for the borrower’s family…
REPAYE application goes live
Borrowers may now enroll in REPAYE using the newly updated electronic Income-Driven Repayment application at studentloans.gov Here’s a preview of the paper application for your viewing enjoyment. The Department of Education’s Repayment Estimator has also been updated to include a REPAYE calculation. And here is the official information about REPAYE and the other Income-Driven Repayment plans posted on studentaid.ed.gov.
Final REPAYE Regs No Big Surprise
At last the final regulations are published! There are a few changes from the draft rules, but nothing major. The best thing? Borrowers can access payments set at 10 percent of "discretionary income" regardless of when we borrowed. Less great: If you borrowed for graduate or professional education, forgiveness is after 25 years rather than 20 years (or 120 payments for Public Service Loan Forgiveness) and spouses will not be able to separate their income, even if they file a separate tax return. Key provisions of the new REPAYE plan…
REPAYE “targets benefits”
The negotiated rulemaking committe reached agreement on a new repayment option, called REPAYE, expected to become available at the end of 2015. I'll be writing lots more about this, but for now I'll start by just listing the provisions I consider pluses and minuses for student loan borrowers. Just can't wait to learn more? Read the proposal here but bear in mind that the next step is for the Department of Education to publish the language that was agreed upon (it's not quite the same), likely…
Who Will Benefit from the Expansion of Pay As You Earn (PAYE)?
Negotiated rulemaking, affectionately referred to as Neg Reg, is underway! Committee members met to discuss a proposed agenda, and the Department of Education will release the committee’s final agenda before they reconvene on March 31st. Over three months the negotiators will discuss, among other things, how to implement the President’s directive to expand Pay As You Earn to five million additional borrowers by the end of this calendar year. The Department of Education has proposed creating a new plan, PAYE2, for Direct Loan borrowers…
