• Like other plans, there is no maximum payment. Rather, 10% of your discretionary income will be collected.
• There is also no payment amount limit for eligibility.
• Interest does not capitalize unless you leave REPAYE.
• If you’re married, both you and your spouse’s income and student loan debt will be considered in determining eligibility – unless there is an issue of domestic violence or the two of you are separated.
• The remaining loan balance is forgiven after 20 years for undergraduate loans (25 years for graduate loans), and the forgiven amount will be taxed as income. To qualify for this plan – or any income-based repayment plan, for that matter – your income and student loan debt amount will be taken into account. If your monthly payment under REPAYE is less than what it would be under a Standard Repayment Plan, you will most likely be able to take advantage of REPAYE. The new repayment plan will be made available to borrowers starting December 16 of this year. If you borrowed before 2010, you may need to take an additional step and consolidate your loans before applying, as stated by TIME. U.S. News & World Report warns that if you’re already 10 years into making payments on your student loans, it may not be worth switching to this plan. Fortunately, you can determine if it’s the right move at StudentLoans.gov. There, you’ll find tools like the Repayment Estimator as well as information for which department to contact in order to switch to REPAYE.
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