With the average student loan balance close to $200,000 following medical school, the resulting debt at the end of training is enormous. We are going to deeper dive into how this works in the next section. REPAYE allows some borrowers who were previously ineligible for PAYE to cap their monthly student loan payments at 10% of discretionary income with REPAYE. "Many borrowers choose the income … The big decision to be made between PAYE and RePAYE is when you start your payments. They are trying to decide between PAYE and REPAYE. Borrowers only qualify for PAYE if they can demonstrate financial need. Like the PAYE plan, REPAYE plans use 10% of your discretionary income to decide your monthly loan repayments. The first difference is that REPAYE payments aren’t capped at the point of standard repayment. When deciding on PAYE vs REPAYE, taking into account your spouses’ or future spouses’ financial situation is a must. – Moving to PAYE from REPAYE (unpaid interest capitalization) Reply. However, they fail to take into account their spouses’ financial situation. Both REPAYE and PAYE calculate payments based on 10% of your discretionary income. REPAYE sets student loan payments no more than 10% of the borrower's income just like PAYE but it offers an interest subsidy that it is not offered with PAYE. But beyond that core similarity, these plans have several important differences. PAYE vs REPAYE: Please help! After that, they'll cover 50% of the interest that accrues. While the names are quite similar, these plans have some big differences to look out for: REPAYE has extra repayment time. There is finally a decent article on this topic. If you took out loans for grad school, PAYE may be a better option. You'll still be responsible for the interest that accrues on any unsubsidized loan. Limits … Moreover, it takes five years longer than PAYE for loan forgiveness. You can switch from IBR to RePAYE or PAYE. PAYE vs. REPAYE: The differences. We break it down in this article … If you received qualifying loans during graduate or professional study, you have 25 years before you get forgiveness, compared to 20 years with PAYE. Income-driven repayment plans like PAYE and REPAYE can be incredibly appealing to borrowers because after the repayment period is up -- 20 years for undergraduate study and 25 years for graduate or professional degree education -- any remaining loan balance is forgiven. Who Can Take Advantage Of The REPAYE Interest Subsidy? PAYE vs REPAYE: 5 Key Questions to Ask. 01.18.18 at 3:34 pm . But there are a couple key differences between REPAYE and PAYE plans. Finally a decent article on PAYE vs REPAYE. How to Qualify for a Pay As You Earn Repayment Plan. Like the PAYE Program, the REPAYE Program offers student loan borrowers a reduced monthly payment capped at 10 percent of discretionary income if approved. One of the main differences is that your spouse’s income does not count for PAYE plans if you file taxes separately. PAYE vs REPAYE: 5 Key Questions to Ask. If the monthly payments are equal, pick REPAYE. The PAYE and REPAYE plans stem from a campaign promise Obama made as he courted young voters, telling them he would provide relief on their student loan payments and help better manage their debt. REPAYE vs. PAYE vs. IBR: How these repayment plans stack up PAYE might be the way to go unless you have older loans or a higher income. 32. REPAYE vs PAYE. PAYE payments are capped at the 10 year standard repayment amount. Their combined income after residency would be around $200k. Posted by 21 hours ago. This yields the same payment for all single borrowers and some married borrowers. But beyond that core similarity, these plans have several important differences. Comparing PAYE to REPAYE . Here’s a closer look at how PAYE vs REPAYE differ. Review: PAYE vs RePAYE #1 Payment Cap. You can switch from PAYE to RePAYE, but that is almost certainly not a good idea. Fact checked. PAYE vs. REPAYE Student Loan Forgiveness. You have the option to file taxes separately and exclude your spouse's income from your PAYE calculation. Most students seeking their medical degree can … This is also why undergrads will most likely not want to use REPAYE vs PAYE. We often see people who know they are going to get married within a year or two. PAYE vs. REPAYE. Finally a decent article on PAYE vs REPAYE. Such a mistake may cost a couple thousands of dollars over time. Unlike REPAYE, only federal borrowers who took out their first student loan after October 1, 2007, are eligible. 7 7. For new doctors, the burden of student loan debt is the norm. In this program, your payment is capped at 10% of discretionary income and will not exceed the standard 10 year repayment amount as your income increases (an important feature for high-income earners such … PAYE vs REPAYE: Loan … REPAYE payments have no cap. I graduated law school in May of this year with 200k of student debt (undergrad+law school) in the form of 14 unsubsidized loans. Another key difference is that the repayment period extends to 25 years for REPAYE plans if you have a mix of graduate and undergraduate loans. Income Based Repayment (IBR) – IBR requires monthly payments calculated at 15% of your monthly discretionary income. PAYE vs. REPAYE for Doctors: Which Student Loan Repayment Plan is Better? #3 Interest Subsidy. With RePAYE both spouses’ incomes are always included even if you file taxes separately. I am single and have landed a job making 65k/year gross. The only thing that matters with PSLF is how much you actually pay over the 120 payments, which as you know will be less if you MFS. With PAYE the concern has been that they will be put into a 10 year Standard plan at some point down the road during those 120 payments, and lose the PSLF being pursued. Currently single, but likely to be married after residency. Posted by 2 years ago. PAYE vs. REPAYE. Anna Serio Updated Nov 7, 2019. Obama unveiled the plan at Colorado University, telling students about his own personal struggle, paying off $120,000 in student loans when he and his wife, Michelle, married. You compare the benefit of the interest subsidy of RePAYE versus the cap on payments of PAYE and of course marriage status, total student loan debt, etc. What is PAYE? But which one will give you the best bang for your buck? Both repayment plans offer borrowers an interest subsidy. You must also have a partial financial hardship (PFH) meaning your debt is disproportionately high compared to your current income. PAYE and REPAYE vs. other income-driven repayment. PAYE payments are capped at the 10-year standard payment whereas RePAYE payments have no cap. How REPAYE Works. There are many key differences that separate PAYE from REPAYE plans. Close. Ben. Revised Pay As You Earn (REPAYE) is the most recent addition to the income-driven repayment plans offered for federal student loans. Here are a few of the key differences to consider – most of which favor PAYE. Following their married filing jointly REPAYE payment of $705 ($8,460 annually), they will still have 50% of any remaining interest paid for by the REPAYE subsidy. Pay As You Earn (PAYE): This is similar to the REPAYE Plan, albeit more stringent in its requirements. PAYE VS. REPAYE are both good options to get out of your student loan debt. 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