Revised student loan repayment plan REPAYE is now available
Learn more about the revised income-driven repayment plan called Revised Pay as You Earn (REPAYE) established by the Department of Education.
Michigan State University Extension knows that student loan repayment continues to be a hardship for many borrowers. Since the fall of 2015, there has been an increase of $30 billion of Federal student loan debt owed. Note: This does not included private student loan debt. In an effort to ease the burden of student loan debt, the Department of Education established a revised income-driven repayment plan called Revised Pay as You Earn (REPAYE).
This revised plan will enable student loan borrowers to pay no more than 10 percent of their monthly discretionary income. It is available for all Direct Federal Student Loans, regardless of when they were first obtained. The updated plan will also forgive any remaining debt after 20 years for undergraduate loans and 25 years for graduate loans. There will be no hardship required to apply.
The REPAYE Plan will also provide an interest subsidy for those whose income-driven payment cannot keep up with accruing interest. There are a couple of caveats. One is that the amount forgiven after 20 or 25 years will be tax as income and the second is that you will have to reapply each year by the due date to continue the plan.
To find the federal student loans you owe, go to their website. You will need to contact each servicer of the individual student loans for an application. Learn more about income-based repayment plans online.
Helpful websites for borrowers:
- Financial Aid Toolkit
- Filling Out the FAFSA
- Michigan College Goal
- MI Student Aid
- MI Student Aid: Scholarships & Grants