What’s always good to hear for students is the multitude of methods they have for paying off student debt once they’re ready. Currently a handful exist already, some aimed at individuals who can pay the max amount and others for those dealing with financial trouble. These options are greatly flexible, and a brand new one has just entered the market.
Some might be familiar with PAYE, a type of consolidated repayment plan that worked based on a percentage of income with a set time for loan forgiveness. Now, most recently, a new method called REPAYE has emerged. Some key differences are immediately helpful, such as there is no time requirement for when a loan needed to be taken out.
Essentially the differences here are aimed at those who haven’t qualified for a PAYE style plan, and there are some nice factors to consider. PAYE, for example, has a 10% threshold for what you pay from earned income, but also has a monthly cap. According to REPAYE, there is no set monthly limit, so if you earn high, you can repay high too.
You also needn’t worry about qualifying for the REPAYE plan based on these mentioned earnings. PAYE was focused on low income and one needed to have proof of this low income to get the plan, but that’s not the case with REPAYE. Heck, if you happen to be married, REPAYE can look at combined earnings to bypass small monthly limits, speeding the overall process of repayment.
Some downsides to consider is still a longer repay period and ultimately paying back more interest, so you get a more reasonable monthly bill, but at the cost of time/money. Then again, if you do happen to start increasing earning power, the total amount can be paid off faster, but the option should still be considered carefully.
Applying for this plan is simple and done at the US Department of Education’s homepage. Note that it requires a 25-year commitment versus the PAYE 20 year, and is mostly aimed at those looking for something along the lines of PAYE but with potential of earning/paying back more. If you don’t happen to get it all paid down though, the 25-year commitment ends and the rest of the balance is forgiven. A pretty sweet deal for income earning students. It should be noted that these plans are only offered to those who have federal student loans; loans from other banks and lenders do not come with these options.
[Want to know more about REPAYE? Read this article: REPAYE and Student Loans: Is Summer of 2016 the Time You Apply?]

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