Introducing the New “Pay As You Earn” Student Loan Repayment Plan
Final regulations implementing the President's “Pay As You Earn” repayment initiative have just been published. The regulations provide for reduced payments for some federal student loan borrowers and improve the federal student loan disability discharge process.
Highlights include:
Eligible borrowers:
- Must not owe a balance on a federal loan as of October 1, 2007; AND
- Must receive a disbursement of a federal loan after October 1, 2011.
Payments will be 10% of discretionary income with forgiveness after 20 years in repayment.
“Pay As You Earn”
The Department of Education agreed with our recommendation to adopt a descriptive and consumer-friendly name for the new repayment plan—Pay As You Earn it is.
UPDATE:
Implementation of Pay As You Earn is set for December 21, 2012!
I’ve got a couple of online trainings scheduled that will cover the ins-and-outs of Pay As You Earn including which loans and which borrowers are eligible. Register here.
