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Dec 27

Student loans putting the hurt on your pocketbook? Feds announce flexible payment plan that might help

wallet moneyWASHINGTON, D.C. – The U.S. Department of Education recently announced the availability of an additional flexible repayment plan that may help borrowers manage their student loan debt.  Every direct loan student borrower will have access to a payment plan that caps monthly federal student loan payments at 10 percent of their discretionary income.

As part the Obama Administration’s continued effort to give borrowers more and better options to manage their student debt, today, the U.S. Department of Education announced that all Direct Loan borrowers may enroll in the Revised Pay As You Earn (REPAYE) Plan. REPAYE, an expansion of  Pay As You Earn, allows more student borrowers to limit the amount of their monthly federal student loan payments to 10 percent of their discretionary income.

“Helping student borrowers manage repayments so that loan debt is not a deterrent for pursing higher education has been a central theme for President Obama’s higher education agenda since the beginning of this Administration,” said Secretary of Education Arne Duncan.” REPAYE is one of a number of key national economic policies this Administration has implemented to make America again the leader in college graduates in the world, while preventing student borrowers from facing unmanageable student loan debt.”

Last year, President Obama issued a Presidential Memorandum directing the Department to propose regulations to ease the burden of student loan debt by expanding repayment options available to borrowers by the end of 2015.

In October, the Department announced the final regulations which allow Direct Loan student borrowers to cap their monthly student loan payment, without regard to when the borrower first obtained their loans.

For more information on REPAYE and other income-driven repayment plans, borrowers can visit www.StudentAid.gov/IDR or contact their loan servicers.

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