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     To Pay or Not to Pay…..It’s Not an Option

To Pay or not to pay, seems to be the question. The reality is, it’s not even an option. You have to pay.  However there are options to help you with repayment. One option is a program called REPAYE, not the same as the PAYE program but it is very similar. REPAYE is a new program that was just started  in December 2015.  As we discuss this option please keep in mind federal student loans have several options so if the REPAYE or PAYE programs are not the right option for you or you do not qualify be aware of the other options available. However,  the REPAYE program may help relieve the burden of debt for even more borrowers than before.

Here are the differences between REPAYE and PAYE: 

The PAYE program (Pay As You Earn) is designed for college grads to pay back their student loan with little stress. Taking ten percent (10%) of your discretionary income to do so rather than the standard calculation which would make it nearly impossible to pay off. This PAYE program will forgive the balance of your loan after twenty (20) years of qualifying. Sounds pretty good right? Only thing is that is only available to recent borrowers.  This is someone who took out loans in 2014 and do not have any loans disbursed prior to Oct. 1, 2007.  Only Direct loans qualify.  If you  file separately from your spouse only your income gets included to qualify you.

The REPAYE Program (The Revised Pay As You Earn) allows even more people to qualify. The payment is still ten percent (10%) of the discretionary income. Only Direct loans qualify but your spouses income would be included even if you file separately.  However, you  do qualify for forgiveness after 20 years.  Also, your standard payment is not capped and can continue to rise as your income rises.  This program may not be the best option for those who know they will make a significant amount more or have a spouse making a large income.  However, for those who really need a lower payment, even if temporary, can utilize the much lower monthly payment. 

Many graduates have very little knowledge on the REPAYE program and are not equipped to make the best decision between the two.  Its important to talk to an expert about the options and have them calculate the new payment amounts under each program and explain the negative aspects of each.  The more you understand about your options the better chances of being able to manage your student loans successfully.   

Schedule a free info session with Degrees of Success at to find out if you qualify.

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