Revised Pay As You Earn Student Loan Forgiveness (REPAYE)

September 28, 2019by Riley Hendrickson0
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Through the Revised Pay As You Earn Student Loan Forgiveness, also commonly referred to as the REPAYE program, qualified applicants may be able to have their monthly student loan payments reduced as low as $0.00 per month. The REPAYE Program offers income-driven repayment plans for your monthly student loan payments at an amount that is intended to be affordable based on your income and family size. Read on to see eligibility requirements, award amounts, and the application process for the Revised Pay As You Earn Student Loan Forgiveness.

Eligibility?

In order to be eligible for the Revised Pay As You Earn Student Loan Forgiveness, you must meet the following criteria to be considered for this program:

*Defaulted loans are not eligible for repayment under any of the income-driven repayment plans.*
There are 3 different plans that are offered through the Revised Pay As You Earn Student Loan Forgiveness program. They are as follows:

REPAYE Plan

Any borrower with eligible federal student loans can make payments under this plan.

PAYE and IBR Plans

Each of these plans has an eligibility requirement you must meet to qualify for the plan. To qualify, the payment you would be required to make under the PAYE or IBR plan (based on your income and family size) must be less than what you would pay under the Standard Repayment Plan with a 10-year repayment period.

  • If the amount you would have to pay under the PAYE or IBR plan (based on your income and family size) is more than what you would have to pay under the 10-year Standard Repayment Plan, you wouldn’t benefit from having your monthly payment amount based on your income, so you don’t qualify.
  • Generally, you’ll meet this requirement if your federal student loan debt is higher than your annual discretionary income or represents a significant portion of your annual income.

In addition to meeting the requirement described above, to qualify for the PAYE Plan you must also be a new borrower. This means that you must have had no outstanding balance on a Direct Loan or FFEL Program loan when you received a Direct Loan or FFEL Program loan on or after Oct. 1, 2007, and you must have received a disbursement of a Direct Loan on or after Oct. 1, 2011.

ICR Plan

Any borrower with eligible federal student loans can make payments under this plan.

This plan is the only available income-driven repayment option for parent PLUS loan borrowers. Although PLUS loans made to parents can’t be repaid under any of the income-driven repayment plans (including the ICR Plan), parent borrowers may consolidate their Direct PLUS Loans or Federal PLUS Loans into a Direct Consolidation Loan and then repay the new consolidation loan under the ICR Plan (though not under any other income-driven plan).

Any borrower with eligible federal student loans can make payments under this plan. The Revised Pay As You Earn program caps your maximum monthly payment at 10 percent of your discretionary income.

If you repay your undergraduate student loans for 20 years, then any remaining balance will be forgiven. Borrowers with graduate student loans must make payments for 25 years before qualifying for forgiveness.

A full breakdown of this program’s requirements can be found on the official government website.

How much can I expect to be awarded? 

Through the Revised Pay As You Earn Student Loan Forgiveness program, your payments are capped at 10 percent of your discretionary income.

For a full breakdown of this award amounts and other offering, head over to their website.

What loans are eligible for this program?

Through the Revised Pay As You Earn Student Loan Forgiveness program (REPAYE), the following loans will qualify:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct Plus Loans made to graduate or professional students
  • Subsidized or unsubsidized Stafford loans, if consolidated
  • FFEL Plus Loans, if consolidated
  • Perkins loans, if consolidate

How do I apply for this repayment program? 

In order to apply for the Revised Pay As You Earn Student Loan Forgiveness, you will need to fill out an application but consider the below information prior to applying.

Before you apply for an income-driven repayment plan, contact your loan servicer if you have any questions. Your loan servicer will help you decide whether one of these plans is right for you.

To apply, you must submit an application called the Income-Driven Repayment Plan Request. You can submit the application online at StudentLoans.gov or on a paper form, which you can get from your loan servicer. The application allows you to select an income-driven repayment plan by name, or to request that your loan servicer determine what income-driven plan or plans you qualify for, and to place you on the income-driven plan with the lowest monthly payment amount.

Note: If you have more than one servicer for the loans that you want to repay under an income-driven plan, you must submit a separate request to each service.

When you apply, you’ll be asked to provide income information that will be used to determine your eligibility for the PAYE or IBR plans and to calculate your monthly payment amount under all income-driven repayment plans. This may be either your adjusted gross income (AGI) or alternative documentation of income.

Your AGI will be used if

  • you filed a federal income tax return in the past two years, and
  • your current income isn’t significantly different from the income reported on your most recent federal income tax return.

You can provide your AGI in one of the following ways:

  • Apply using the online Income-Driven Repayment Plan Request and use the IRS Data Retrieval Tool in the application to transfer income information from your federal income tax return.
  • Use the paper Income-Driven Repayment Plan Request and provide a paper copy of your most recently filed federal income tax return or IRS tax return transcript.

If you haven’t filed a federal income tax return in the past two years, or if your current income is significantly different from the income reported on your most recent federal income tax return (for example, if you lost your job or have experienced a drop in income), alternative documentation of your income will be used to determine your eligibility and calculate your monthly payment amount. You can provide alternative documentation in one of the following ways:

  • If you currently receive taxable income, you must submit a paper Income-Driven Repayment Plan Request with alternative documentation of your income, such as a pay stub.
  • If you currently don’t have any income or if you receive only untaxed income, you can indicate that on the online or paper application. In this case, you’re not required to supply further documentation of your income.

Depending on whether you applied electronically or submitted a paper request form and whether you’ve submitted all required documents, it may take your servicer a few weeks to process your request, because they will need to obtain documentation of your income and family size. If you are currently repaying your loans under a different repayment plan, your loan servicer may apply a forbearance to your student loan account while processing your request for an income-driven repayment plan.

Questions?

If you still have questions or would like to know more information please reach out to us here or you can go back to the Student Loan Repayment Assistance Programs page.

 

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