In June 2014, President Obama issued a Presidential Memorandum directing the Department of Education to propose regulations to further ease the burden of student loan debt. On Oct. 27, 2015, the Department of Education issued a final regulation establishing a new income-driven repayment plan, the Revised Pay As You Earn (REPAYE) Plan.
Benefits of REPAYE Plan The REPAYE Plan enables 5 million more Direct Loan borrowers to cap their monthly student loan payment amount at 10 percent of monthly discretionary income, without regard to when the borrower first obtained the loans. The REPAYE Plan improves upon the current Pay As You Earn Plan while extending its protections to all student borrowers with Direct Loans.
In addition to the monthly payment cap, REPAYE will forgive remaining debt after 20 years for those who borrowed only for undergraduate study and 25 years for those who borrowed for graduate study. The REPAYE Plan also will provide a new interest subsidy benefit to prevent ballooning loan balances for those whose income-driven payments cannot keep up with accruing interest.
Additional Information About REPAYE and Other Income-based Plans The REPAYE Plan will be available to borrowers starting in mid-December 2015. For more information on REPAYE, read the Department of Education’s REPAYE Plan press release and REPAYE Plan blog post. Interested in learning more about income-based repayment options? Call Assisting America today! Original article from Federal Student Aid