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| Eligible loans | How much you pay | Repayment term | Who it’s best for |
|---|---|---|---|
| 10% of your monthly discretionary income |
| Single borrowers paying off undergraduate debt in a low-paying field or looking to qualify for PSLF or Teacher Loan Forgiveness. |
The REPAYE Repayment Plan is one of four income-driven repayment (IDR) plans available for federal loans. It allows you to pay off your debt with monthly repayments based on 10% of your discretionary income. The Department of Education (DoE) forgives any remaining balance after 20 years of repayments on undergraduate student debt. Graduate and professional student loans take 25 years to qualify for forgiveness.
Your discretionary income is the difference between your household income before taxes and 150% of the poverty guideline for your family size in your state. You can find out what the poverty guideline is for your family size and state on the Department of Health and Human Services website.
Say your household makes $40,000 a year and you live in one of the 48 contiguous states. Here’s how much you’d pay based on different family sizes — keeping in mind that the $40,000 would include your spouse’s income as well.
| Family size | Poverty guideline | Discretionary income | Monthly REPAYE repayment |
|---|---|---|---|
| 1 | $12,490 | $21,265 | $177 |
| 2 | $16,910 | $14,635 | $122 |
| 3 | $21,330 | $8,005 | $67 |
| 4 | $25,750 | $1,375 | $11 |
So what if you get married to someone who also makes $40,000? Your repayments will increase with this repayment plan. And theirs will too if they also choose this plan — even if you file taxes separately.
| Family size | Poverty guideline | Discretionary income | Monthly REPAYE repayment |
|---|---|---|---|
| 2 | $16,910 | $54,635 | $455 |
| 3 | $21,330 | $48,005 | $400 |
| 4 | $25,750 | $41,375 | $345 |
Unlike some other IDR plans, the REPAYE Plan doesn’t cap repayments at the amount you’d pay on the Standard Repayment Plan. If you get married or get a raise, this plan could actually be the most expensive option.
How to calculate your monthly discretionary income
You’re eligible for the REPAYE Plan if you have an eligible federal loan — there are no other requirements. Qualifying loans include:
You can. You’re eligible for forgiveness after making 20 years of repayments on this plan for undergraduate loans or 25 years for graduate loans. The DoE also recommends this plan if you want to apply for Public Service Loan Forgiveness (PSLF) — though you’ll have to meet other requirements.
On top of this, you’re also eligible for Teacher Loan Forgiveness and a wider range of other loan repayment assistance programs available through government agencies and private organizations.
Here are some of the major perks and pitfalls of the REPAYE Plan — compared to other income-driven plans.
You might want to consider the REPAYE Plan in the following situations:
If it’s your first time signing up for repayments, your servicer will reach out with instructions on how to set up your account and pick a repayment plan. Otherwise, the easiest way to sign up is through your account on the Federal Student Aid (FSA) website. Follow the same steps you would to sign up for any other IDR plan.
How to apply for income-driven repayments
Not exactly. But you need to get your income recertified each year to update your income and family size. You can do this on the FSA website by logging in to your account and filling out a quick online form. You can either enter your tax information manually or use the IRS Data Retrieval Tool to upload your details automatically.
If you’re on the fence about signing up for the REPAYE Plan, you might want to consider one of these options instead:
The REPAYE Plan isn’t right for everyone. But if you’re single, paying off undergraduate debt and are hoping to qualify for PSLF, it could be a good fit. You can find out how it compares to other repayment options — including other IDR plans — by reading our guide to student loan repayment programs.
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