The Revised Pay as You Earn Plan (REPAYE) is President Obama's expansion of the PAYE plan to an estimated 5 million more borrowers. Borrowers only qualify for PAYE if they can demonstrate financial need. 225k Student Loans, What should I do? There are reasons PAYE can be a better choice for many borrowers, but the interest capitalization cap isn’t really one of them. 90% de ton pavé est composé de reproches, non mais ! The first difference is that REPAYE payments aren’t capped at the point of standard repayment. In some respects, Pay As You Earn Plan comes out as the clear winner against IBR. - Duration: 8:01. Here’s a closer look at how PAYE vs REPAYE differ. But because PAYE monthly payments are capped at the amount that would be due for the standard 10-year repayment, PAYE payments can be lower than REPAYE payments for high earners. 9:08. This yields the same payment for all single borrowers and some married borrowers. REPAYE Features . The REPAYE Interest Subsidy. REPAYE when both spouses have student debt. The consistently most read post on FPMD has been PAYE vs. REPAYE for more than 1 year now. PAYE payments are capped at … IBR VS PAYE VS REPAYE : IBR: PAYE: REPAYE: Eligible Loans-All federal Family Education Loan Program, Stafford and Grad Plus Loans-All FFELP and direct loan consolidation loans that do not contain parent PLUS Loans-All Stafford loans or Grad Plus Loans disbursed on or after October 1, 2011. With the average student loan balance close to $200,000 following medical school, the resulting debt at the end of training is enormous. We break it down in this article … On an annual basis, your servicer will calculate your payment based upon 10% of your household income that exceeds 150% of the federal poverty guideline for your family size. To illustrate the difference of PAYE vs REPAYE, I’ll use the following example: Your interest charge is $700 per month, Your required monthly payment on both PAYE and REPAYE is $300 per month (if you need help figuring out what your payment would be check out our IDR calculator). Difference Between PAYE vs REPAYE PAYE: Pay as You Earn – An income driven repayment plan for borrowers who took eligible loans during a specific time frame of disbursement. If your debt is starting to dwarf your income and you’re seeking the lowest possible monthly payment, PAYE is likely your best option. It is essentially a combination of PAYE and IBR, with a few new features thrown in. It lowers your monthly payments to just 10% of your discretionary income and offers loan forgiveness after 20 years, no matter when you borrowed your loans. PAYE also allows for the married-filing-separately loophole that REPAYE closes. PAYE vs. IBR – Which should you choose? PAYE vs. REPAYE for Doctors: Which Student Loan Repayment Plan is Better? I mentioned previously that I switched from IBR to REPAYE via this White Coat Investor guest post.Now that I've been on REPAYE for almost 9 months, let's take a closer look at my student loans under the new repayment terms. With both the PAYE and REPAYE plans, your monthly payment will generally be 10% of your discretionary income. I Switched to REPAYE and I Like It. REPAYE vs. PAYE: Which Student Loan Payment Plan is Better? Comparing PAYE to REPAYE For example, if their average interest rate was 6%, this couple would be accruing approximately $24,000 in interest annually on their $400,000 in combined debt. Suppose that both of you have a combined discretionary income of $100,000. Considering I just started residency and my spouse will start next year, our total debt burden will be roughly 600k (mine 350 and her 250). As you can see, if you have $400k in loans, you will accrue $30k of additional interest in PAYE vs. REPAYE by the end of PGY3, and $61k by the end of PGY6 based on the interest subsidy alone. You are better off choosing the best plan up front or switching to PAYE while still in residency.. You will not be able to change to IBR once your income increases, nor will you be able to switch to the 10-Year Standard Repayment plan. PAYE vs. REPAYE. PAYE versus REPAYE Comparison Chart (January 2018) - Duration: 9:08. What is the Revised Pay as You Earn (REPAYE) Program? However it is not as simple as that. Try typing "PAYE vs. REPAYE" into Google and you'll see why. If you have a particularly high loan burden and a long training period, you could end up accruing over $100k of additional interest just by missing out on the REPAYE subsidy. You do get an interest subsidy with REPAYE, but if you have a lot of interest that will capitalize and won't be doing REPAYE for long, it may not be worth it. REPAYE uses the same payment formula as PAYE. Paye vs Repaye Both the Revised Pay as you earn and pay as you earn are the same because they are part of the same income-driven repayment plans one of them cap about 10% of the discretionary income to pay off the interest amount whereas the other does actually raises the monthly payment as the income increases and that the reason the person is able to get close to forgiven payment. Click here to learn more about the battle between PAYE vs REPAYE. Pursuing PSLF and planning to switch from RePAYE to PAYE after residency does not work. PAYE payments are capped at the 10-year standard payment whereas RePAYE payments have no cap. Like the PAYE plan, REPAYE plans use 10% of your discretionary income to decide your monthly loan repayments. The Department of Education offers four income-driven repayment plans in total. In terms of PAYE VS REPAYE, the new program makes the benefits available to more borrowers. 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