If you’re a borrower with student loan debt, you’ve probably heard about today’s launch of the government’s newest income-driven repayment plan — the Revised Pay As You Earn, or REPAYE plan.
REPAYE will give 5 million more borrowers the option to cap their student loan payments at 10 percent of their income, and could help you save a pretty chunk of change each month. But every student loan repayment plan comes with fine print you should keep in mind when deciding which plan may be best for you.
As is the case with other income-driven repayment plans like Pay As You Earn (PAYE) and Income-Based Repayment (IBR), REPAYE might allow you to start out making smaller monthly payments than you would under a Standard Repayment Plan. That sounds great, but in some situations you’ll end up paying more under REPAYE in the long run.
Source: Department of Education
To help you understand the nitty gritty details of REPAYE, we’ve put together a guide that will quickly get you up to speed. Our guide includes a breakdown of how REPAYE stacks up against Standard Repayment Plans if you’ve consolidated your loans (hint: it stacks up very well).
Check out the REPAYE guide here.
Ariha Setalvad <email@example.com> is a Credible staff writer. Follow us on Twitter at @Credible.