“REPAYE” Program Now in Effect for Students

admin Federal Student Aid Programs, Financial Aid Industry News


As of December 17, 2015, federal student loan borrowers have a new income- driven repayment plan at their disposal. REPAYE is an acronym for Revised Pay As You Earn. The program is aimed at capping student loan payments to 10% of the borrower’s discretionary income. There are no income requirements and it is available to all students who have a Direct loan, regardless of when it was taken out. PLUS loans are the only exception to these requirements.

Like the other recent income-driven plans enacted, there is loan forgiveness available at the end of the repayment period. It is 20 years if all loans were utilized for undergraduate work and 25 years for those at the graduate level. The new REPAYE forgiveness is five years shorter than Income-Based Repayment (IBR) and Income-Contingent Repayment (ICR) plans for those with only undergrad studies. Another added positive with REPAYE includes picking up interest payments so loan balances don’t balloon out of control which is important for those paying less per month than the interest that is accruing.

While there can be a dizzying array of payment plans of all shapes and sizes for students, this is further good news for those that have been struggling to pay ever increasing student loan debt. In the summer of 2014, President Obama issued a Presidential Memorandum, directing the Department of Education to propose regulations to ease the burden of student loan debt by the end of 2015 and they succeeded with the newly created REPAYE option.

Spreading this information around the financial aid community is critical for it to end up in students’ hands. Those students who may have problems repaying their loans are the same students who are less educated on the options that are available to them. Here at HEAG, we strive to keep you informed and updated on all of the changes happening throughout the financial aid world which in this case, could impact and possibly lower your Cohort Default Rate.



http://www.ed.gov/news/press-releases/us-department-education-announces- availability-additional-flexible-repayment-plan-help-borrowers-manage-their- student-loan-debt

https://www.ifap.ed.gov/eannouncements/121715LSIAvailREPAYEandNewIDR Request.html