The Revised Pay As You Earn (REPAYE) Program can help you limit student loan payments to 10 percent of your discretionary income and offers complete student loan forgiveness to those who qualify.
After signing the PAYE Program into law in 2012, President Barack Obama approved an extension to the program in 2015, offering even more federal student loan borrowers a way to pay off student debt. Known as the REPAYE Program, the new law featured less restrictions than PAYE, while continuing many of the same benefits as the original program.
How to Qualify for the REPAYE Program
Applicants will need to meet several requirements before getting approved for the REPAYE program. First, unlike the PAYE Program, REPAYE allows anyone with eligible federal student loans to participate in the program, regardless of the student loan’s origination date. This includes applicants whose loans originated before the October 1, 2007 PAYE deadline.
The student loans eligible for the REPAYE Program include:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct PLUS Loans made to graduate or professional students
- Direct Consolidation Loans not used to repay PLUS loans made to parents
- Consolidated Subsidized Federal Stafford Loans from the FFEL Program
- Consolidated Unsubsidized Federal Stafford Loans from the FFEL Program
- Consolidated FFEL PLUS Loans made to graduate or professional students
- Consolidated FFEL Consolidation Loans not used to repay PLUS loans made to parents
- Consolidated Federal Perkins Loans
Any private loans, PLUS Loans made to your parents, or Consolidation Loans that were used to repay loans made to your parents are ineligible for the REPAYE Program.
Find out if you can take advantage of the REPAYE Program for free.
How REPAYE Works
Like the PAYE Program, the REPAYE Program offers student loan borrowers a reduced monthly payment capped at 10 percent of discretionary income if approved. Discretionary income is determined by subtracting 150 percent of your state’s poverty level, which is based on your household’s size, from your household’s adjusted gross income (AGI).
Monthly payments for the REPAYE Program are based on the amount you make annually, and are reassessed each year to determine your new monthly payment for the next year. There is currently no cap on the size of your monthly payment, and your spouse’s income and existing federal student loan debt may be calculated into your monthly payment.
Depending on your level of education, REPAYE offers two options for student loan forgiveness. After 20 years, undergraduates who take part in the REPAYE Program can have their student loans forgiven if they make consistent payments during this period. Those who earn graduate or professional degrees, on the other hand, are eligible for student loan forgiveness after 25 years of meeting program requirements, which includes making regular monthly payments. As with PAYE, student loans forgiven under the REPAYE Program may be taxed by the IRS.
For more details on the REPAYE program, speak with a REPAYE specialist by phone at (800) 670-4196.