Go for a longer term or income-driven repayments if your student loans are eating up too much of your income. As a result, IBR should be seen as a more stable plan. > $30k/yr). Difference #1: Term. The forgiveness timelines between IBR, PAYE, and REPAYE are different (25 years, 20 years, and 20/25 undergraduate vs graduate, respectively). I know the REPAYE plan uses our combined income. 1 in 4 borrowers puts at least 11% of paycheck toward student loans – here’s how to lower repayments. Note: If you are using either of these strategies, you do not want to refinance your student loans. (For RePAYE, as for PAYE and IBR, discretionary income is defined as the difference between your annual income and 150 percent of the federal poverty guideline for … Forgiveness Details As I’m now doing my taxes and trying to decide how my wife and I should file (married jointly vs separately), I’ve come to the realization that under almost no circumstance does switching from IBR to REPAYE work in one’s favor if your spouse earns any meaningful amount of income (i.e. IBR student loan payments are 15% of your discretionary income but are capped at the monthly amount calculated by the standard 10-year repayment plan when you first entered repayment. IDR plans include Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR) Plans. This is not a big deal now, since she is also paying off student loans, but it will make my payment jump significantly when her loans are forgiven in 9 years. Under these plans, your monthly payment is based on your income and family size. If you took out loans on or after July 1, 2014, IBR would lower your monthly payments to 10% percent of your discretionary income. PAYE is 20 years long for both undergrad and graduate loans. Summary of IBR vs PAYE vs REPAYE. PAYE and REPAYE vs. other income-driven repayment. It limits payments to either 10% or 15% of your discretionary income, depending on the type of loan, whereas ICR caps payments at 20%. REPAYE Got Rid of the IBR Payment Cap. Income-Based Repayment (IBR) Best for: Recent borrowers who can’t afford the standard 10-year repayment plan, don’t qualify for PAYE, and don’t expect to qualify for loan forgiveness under REPAYE or for borrowers who have older FFEL loans and don’t want to fold them into a federal direct consolidation loan Available to borrowers since 2009, IBR remains the most popular IDR plan. The REPAYE Alternative repayment plan period is the lesser of 10 years or whatever is left on your 20- or 25-year REPAYE repayment period and the monthly payment amount will be a fixed amount that will pay your loans in full during that period. More guides on Finder. However, a plan like IBR would take help in the form of an act of Congress if the President wanted to get rid of it. IBR typically lowers your monthly payment more than ICR does. REPAYE eliminated the monthly payment cap. If you do, then you will not qualify to use these plans. If you choose to leave REPAYE, any unpaid accrued interest will be capitalized. Thus, if a new President wanted to eliminate REPAYE immediately, it could be done. Unlike REPAYE, IBR was passed into law by an act of Congress and signed by the President. Income-driven repayment plans can help lower your monthly student loan payment. 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