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 in early July. Then comes public comment, possible tweaks, and only then final rules.
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No Partial Financial Hardship is required to enter REPAYE.
Monthly payments are 10 percent of “discretionary income”.
If your payment does not fully cover interest charges, you will be charged only 50 percent of the unpaid interest.
If you borrowed only for undergraduate education, forgiveness of any remaining balance is after 20 years of repayment.
For REPAYE, it doesn't matter when you got your loans.
If you borrowed any amount for graduate or professional education, forgiveness is after 25 years of repayment.
If you are married, your spouse’s income will be included in calculating your monthly payment amounts, even if you file a separate federal tax return.
There is no cap on the monthly payment amount.