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Department of Education Reopens Two Older Repayment Plans
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Main points
- The Department of Education is reopening the Income-Based Repayment (ICR) program and Pay as you go (PAYE) until July 1, 2027.
- These older repayment plans have opened up, giving SAVE plan borrowers who were in forbearance the opportunity to make qualifying payments to qualify for forgiveness.
- The PAYE plan offers the lowest monthly payments for most borrowers, but the ICR plan may be better for people whose debt is less than their income.
The Department of Education on Wednesday relaunched two older repayment plans so borrowers can continue paying off their student loans.
Borrowers can now apply for the Income-Based Repayment (ICR) program Pay as you go (PAYE) until July 1, 2027.
These programs are open to Provide more choices to registered borrowers Save for a valuable education (SAVE) Plans and those placed in forbearance after federal court orders student loan forbearance forgiveness pause.
During the moratorium, payments will not be due and interest will not accrue. However, the borrower cannot Qualifying Loan Forgiveness Payments and have been in trouble Meanwhile the court case continues. The department said the grace period will be lifted once a borrower joins ICR or PAYE.
What are these two options?
While these two recovery options may not be as generous as the SAVE program, they can help borrowers in a variety of situations. Experts say some options may be better than others, depending on the borrower’s needs and circumstances.
The Department for Education says the PAYE scheme offers the lowest monthly repayments for most borrowers. ICR plans have an alternative formula for calculating monthly payments, which can provide lower payments for those whose debt is “low relative to their income.”
Borrowers can participate in any income-driven repayment plan here.
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