Student Loans: Available repayment Plans

by DeLadurantey Law Office, LLC on August 14, 2014

Bag with Student LoanThere have been numerous recent changes to the rules governing student loans. Effective July 1, 2014, borrowers have new options for repaying student loans with income-based repayment plans. The new options affect not only borrowers with existing loans, but new borrowers as well.

The income-driven repayment plans are determined by a formula that determines a percentage of your monthly disposable income that can be used to pay your student loans. Depending on the type of repayment plan you are using and when you received your federal loan, the applicable percentage differs. Your payment is generally calculated as follows:

  • Pay As You Earn Plan (PAYE). Under the PAYE repayment plan, you are typically required to pay 10% of your discretionary income. However, both existing and new borrowers’ monthly payments cannot be more than the 10-year Standard Repayment Plan amount. A borrower that uses the PAYE plan may be able to have any remaining balance on their student loan forgiven after 20 years, instead of 25 years.
  • Income-based repayment plan. If you have an existing student loan on or after July 1, 2014, you are typically required to pay 15% of your discretionary income to pay your student loans. If you are a new borrower on or after this date, 10% of your discretionary income must be applied to repay your loans. In both instances, however, your monthly payment cannot be more than the 10-year Standard Repayment plan amount.
  • Income Contingent Repayment (ICR) Plan. Repayment plans that are contingent on your income require you to pay 20% of your discretionary income or what you would be required to pay on a repayment plan with a fixed payment over the course of 12 years, adjusted according to your income, whichever is less.

To learn more about repaying your student loans and how we can assist you, call today to schedule an appointment.

The “Milwaukee Bankruptcy Attorneys,” DeLadurantey Law Office, LLC handle Chapter 7 and Chapter 13 bankruptcies, as well as student loan assistance, debt negotiations, debt relief, mortgage loan modifications, and foreclosure defense and debtor’s rights matters. We serve the areas of Milwaukee, South Milwaukee, West Milwaukee, Milwaukee County, and Waukesha County, including the municipalities of Big Bend Village, Brookfield City, Brookfield Town, Butler Village, Chenequa Village, Delafield City, Delafield Town, Dousman Village, Eagle Town, Eagle Village, Elm Grove Village, Genesee Town, Hartland Village, Lac La Belle Village, Lannon Village, Lisbon Town, Menomonee Falls Village, Merton, Town, Merton Village, Mukwonago Town, Mukwonago Village, Muskego City, Nashotah Village, New Berlin City, North Prairie Village, Oconomowoc City, Oconomowoc Lake Village, Oconomowoc Town, Ottawa Town, Pewaukee City, Pewaukee Village, Summit Town, Sussex Village, Vernon Town, Wales Village, Waukesha City, and Waukesha Town. Call DeLadurantey Law Office by phone at (414) 377-0518.



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