Income Driven Repayment Plan Vs Pay As You Earn

The good news is that two newer repayment plan options income based repayment and pay as you earn are making life oh so much better for cash strapped borrowers.

Income driven repayment plan vs pay as you earn. Ford federal direct loan direct loan program and federal family education loan ffel programs. Under these plans your monthly payment is based on your income and family size. Revised pay as you earn repayment plan repaye. Income driven repayment plans can help lower your monthly student loan payment.

As you re choosing between income driven repayment plans you may find yourself torn between pay as you earn paye versus income based repayment ibr. Income driven repayment or idr is an umbrella term for four federal student loan repayment options. The pay as you earn paye repayment plan is one of four income driven repayment plans for federal loans. With student loan balances averaging more than 29 000 for recent grads and unemployment and underemployment continuing to plague many some find that their loan payments are unmanageable.

Under this plan your payments generally amount to 10 of your discretionary income and be due over a period of 20 years for undergraduate loans. I just finished by masters degree and currently job searching. Discretionary income is determined by taking your adjusted gross income and deducting the poverty guidelines based on family size. For the revised pay as you earn repaye pay as you earn paye income based repayment ibr and income contingent repayment icr plans under the william d.

I have an insane amount of student loans to deal with for the rest of my life. The language around student loans gets confusing fast but some of the most perplexing terms have to do with income driven repayment plans. Each one has slightly different rules about how much your monthly payments will be how. Income driven repayment idr plan request.

While this plan is similar to the income based repayment plan which caps monthly loan payments at 10 15 of discretionary income based on when your loans were disbursed pay as you earn caps payments at 10. Revised pay as you earn repaye. Idr plans include revised pay as you earn repaye pay as you earn paye income based repayment ibr and income contingent repayment icr plans. Income based repayment plans also called income driven repayment plans are recommended for federal loan borrowers whose monthly loans add up to more than 10 of their discretionary income.

Pay as you earn vs income based repayment vs income contingent repayment.