Revised Pay As You Earn (REPAYE)

February 10, 2022

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REPAYE, like PAYE, offers one of the lowest possible monthly payments, which can make repaying your federal student loans more manageable during residency. Review the features of REPAYE to determine if it’s the right repayment plan for you. 

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REPAYE Features

Your monthly payment is based on your discretionary income and your household size. REPAYE does not put a cap on your monthly payment amount, so as your income rises, so will your monthly payment. On an annual basis, your servicer will calculate your payment based upon 10% of your household income that exceeds 150% of the federal poverty guideline for your family size.

Since your monthly payment is adjusted annually, you will need to submit income verification as well as household size information on a yearly basis. As part of the re-certification process, you will also need to submit the Income-Driven Repayment (IDR) Plan Request. If your household income or household size changes before it’s time to recertify, you can request a payment recalculation at StudentAid.gov.    

If you are married, your spouse’s income and loan debt (if applicable) will be used to calculate your monthly loan payment. This is true regardless of your tax filing status.

Graduate/professional loan borrowers can remain in REPAYE for up to 25 years. If the borrower has a remaining loan balance after 25 years, that balance is forgiven; however, the forgiven amount is taxable.

REPAYE offers an interest subsidy that could lead to lower total repayment costs. If your monthly payment doesn’t cover the full amount of interest that accrues on the loan (negative amortization), then the government will pay 50% of the difference. It should be noted that any extra payments in REPAYE will affect the subsidy on any loan that a borrower overpays; however, the benefit of paying extra means that the borrower could pay a specific loan off faster.

Eligible Borrowers

Any borrower with an outstanding Direct Loan is eligible to repay their loan under this income-driven repayment plan.

Eligible Loans
  • Direct Subsidized and Direct Unsubsidized Loans
  • Direct PLUS Loans (does not include Direct PLUS Loans made to parents)
  • Direct Consolidation Loans
  • Perkins and LDS Loans (only eligible if consolidated into a Direct Consolidation Loan)
Benefits of REPAYE
  • The REPAYE plan offers one of the lowest monthly payments.
  • An interest subsidy is available during periods of negative amortization.
  • Unpaid interest won’t capitalize while in REPAYE.
  • REPAYE is an eligible plan for Public Service Loan Forgiveness (PSLF).
Your Monthly Payment Amount

Use the AAMC’s MedLoans® Organizer and Calculator to estimate your monthly payment amount. Your servicer can provide exact payment information.

Example of a PGY-1 Resident in Revised Pay As You Earn (REPAYE)

Monthly Adjusted Gross Income (1) $4,980
(minus) 150% of Poverty Line (2) - $1,640
Discretionary Income (3)     = $3,340
(multiplied by) (4) x .10%
Monthly REPAYE Payment (5) $330

1. Based on AAMC estimate for the 2022 first post-MD-year median stipend.
2. Based on the 2022 federal poverty guideline for a family size of one in the 48 contiguous states.

3. Discretionary income is the difference between your income and 150% of the poverty guideline. (based on your family size and state of residence).
4. Based on 2015 federal regulations.
5. Rounded to the nearest $10.

Recertify on Time

If you fail to submit annual income and household size information to your servicer by the annual deadline date, you will be removed from the REPAYE plan and put into a different repayment plan (Standard) which is not based on your income. If this happens, you will likely see a dramatic increase to your monthly payment. Additionally, outstanding interest will capitalize. For more information, review the Income-Driven Plans page on the Federal Student Aid website.

 

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