Income-Driven Repayment Plans: Questions And Answers - Federal Student Aid, U.s. Department Of Education Page 22
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26For example:
You received loans for undergraduate study and begin repaying those loans under the REPAYE Plan
when they first enter repayment. Because all of the loans you are repaying under REPAYE were
received for undergraduate study, your repayment period is set at 20 years.
After your first year of repayment under the REPAYE Plan, you do not recertify your income.
Starting with year 2 of repayment, you are placed on the alternative repayment plan. Your repayment
period is set at 10 years, because 10 years is less time than the remaining portion (19 years) of your
REPAYE Plan repayment period.
Your payment amount under the Alternative Repayment Plan is $200 per month, and you pay this
amount for 12 months.
You decide to reenter REPAYE and provide the necessary documentation to your loan servicer. Your
loan servicer determines that your REPAYE payment amount for the past year would have been $300
per month.
You paid $1,200 less over the course of the year under the alternative repayment plan than you
would have paid during the same period under the REPAYE Plan.
When you reenter REPAYE, you will have 18 years of your repayment period remaining, so the
$1,200 is divided by 216 (there are 216 months in 18 years), which equals $5.55 per month. This
amount will be added to your payment amount each month that you remain in REPAYE.
Your payment amount under REPAYE for the upcoming year (based on newer income
documentation) will be $150 per month.
After the increase is added in, your total REPAYE payment will be $155.55 per month for the next
year.
42. How long will it take my loan servicer to process my Income-Driven Repayment Plan
Request?
The time varies, depending on whether you apply electronically or submit a paper Income-Driven
Repayment Plan Request. It may take a few weeks, since the servicer will need to obtain documentation
of your income and family size. If you are currently repaying your loans under a different repayment plan,
your loan servicer may apply a forbearance to your student loan account while processing your request
for an income-driven repayment plan.
43. I want to apply for an income-driven repayment plan, but the AGI shown on my most
recent federal income tax return is significantly higher than my current income. I had to
change jobs and I’m now earning much less than I earned during the period covered by
my most recent tax return. What can I do?
If your AGI doesn’t accurately reflect your current circumstances, you can submit alternative
documentation of your income, such as your latest pay stubs. The Income-Driven Repayment Plan
Request (both electronic and paper) provides detailed guidance on submitting alternative documentation
of income.
Federal Student Aid |
StudentAid.gov
Page 22 of 26
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