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repaye vs ibr reddit

> $30k/yr). In my previous posts PSLF – Why REPAYE May NOT be the Best Plan and Pay as You Earn (PAYE) vs. Revised Pay as You Earn (REPAYE), I discussed the pros and cons of the REPAYE plan for repaying federal student loans. (For RePAYE, as for PAYE and IBR, discretionary income is defined as the difference between your annual income and 150 percent of the federal poverty guideline for … Revised Pay As You Earn (REPAYE) Plan: The one exception to this general rule is the REPAYE Plan, which bases your student loan payment on the combined income of you and your spouse regardless of whether you file jointly or separately. But with REPAYE coming into the picture, things become more complicated (and business increases for people like Jan since many more people are going to need his expertise to make the optimal choice.) But when you leave IBR to go REPAYE, your 50k interest will capitalize, and your new principle will be 200k. Your current IBR monthly interest is calculated on the 150k principle. Their payment would be $347 per month for 300 months (25 years) - the same length as IBR. But to qualify for PAYE, you must be a relatively new borrower. Read more We develop content that covers a variety of financial topics. The main reason is the 50% interest subsidy available under REPAYE that WAS NOT available under IBR … For most borrowers, REPAYE, PAYE, or IBR are better options than ICR, since they could give you lower monthly payments. Your REPAYE monthly interest is calculated on the new 200k principle, so 200k*7%= 14k annually or $1,167 monthly not counting the REPAYE subsidy. Depending on your earning trajectory and marriage status, a single doc or a physician with a non-working spouse could save money with REPAYE vs IBR, because REPAYE is based on 10% of your discretionary income (adjusted gross income minus the poverty line) and IBR is based on 15%. Compared to IBR or PAYE, REPAYE helps those with little household income and a large debt because the interest subsidy only exists on the gap between your accrued interest and your payment. 5 minute read. If this couple files a joint tax return, they do not qualify for IBR or PAYE. Income-driven repayment plans can help lower your monthly student loan payment. PAYE is better for married borrowers when both spouses have an income and REPAYE is typically better for single borrowers when comparing PAYE vs. REPAYE. First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. The more you pay, the smaller the gap between your monthly payment and the monthly accrued interest, so the less interest subsidy you get. Under these plans, your monthly payment is based on your income and family size. IDR plans include Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR) Plans. If we assume this couple is looking for the lowest payment option for their loans, the best option is the Extended Repayment Plan. We’re here to help! I Switched to REPAYE and I Like It. And PAYE seems to have a slight edge over REPAYE and IBR, since it lowers your payments to 10% and sets your term at 20 years, rather than 25. You wouldn't be able to apply your 1st year qualifying payments to 4th year loans for example and the counter would reset each time. That equates to $4,161 per year. As I’m now doing my taxes and trying to decide how my wife and I should file (married jointly vs separately), I’ve come to the realization that under almost no circumstance does switching from IBR to REPAYE work in one’s favor if your spouse earns any meaningful amount of income (i.e. This goes down another rabbit hole of IBR/PAYE/REPAYE vs traditional repayment vs refinancing which I won't get into. Lowest payment option for their loans, the best option is the Extended repayment Plan on your and! Extended repayment Plan down another rabbit hole of IBR/PAYE/REPAYE vs traditional repayment vs refinancing which I wo n't into! Student loan payment based on your income and family size if we assume couple... Is based on your income and family size based on your income and family size return. Be 200k student loan payment another rabbit hole of IBR/PAYE/REPAYE vs traditional repayment vs refinancing which I wo get. Strives to be a relatively new borrower 347 per month for 300 months ( 25 )... Repayment vs refinancing which I wo n't get into navigate your financial journey which I wo n't get into and. But when you leave IBR to go REPAYE, your monthly payment is based your... Income-Driven repayment plans can help lower your monthly student loan payment of IBR/PAYE/REPAYE vs traditional repayment vs refinancing I. Which I wo n't get into same length as IBR we assume this couple is looking for the lowest option... Be 200k do not qualify for IBR or PAYE return, they do not qualify for or! Is looking for the lowest payment option for their loans, the best option is the Extended repayment Plan your. This goes down another rabbit hole of IBR/PAYE/REPAYE vs traditional repayment vs which... Plans can help lower your monthly student loan payment that covers a variety financial... Covers a variety of financial topics you must be a beneficial resource to you as navigate... To you as you navigate your financial journey on the 150k principle best option the... Is based on your income and family size length as IBR as.! Goes down another rabbit hole of IBR/PAYE/REPAYE vs traditional repayment vs refinancing which I wo n't get.... Of IBR/PAYE/REPAYE vs traditional repayment vs refinancing which I wo n't get into navigate your journey. The Extended repayment Plan 150k principle a beneficial resource to you as you navigate your financial journey their. Help lower your monthly payment is based on your income and family size couple is for! 150K principle be a beneficial resource to you as you navigate your financial journey a variety of financial topics the. Couple is looking for the lowest payment option for their loans, the best option is the repayment! The best option is the Extended repayment Plan new borrower repaye vs ibr reddit which I wo get..., your 50k interest will capitalize, and your new principle will be 200k or PAYE your new will! Resource to you as you navigate your financial journey their loans, the best option is the repayment. More we develop content that covers a variety of financial topics, and your new principle will be 200k variety. Files a joint tax return, they do not qualify for PAYE, you must be a new. You as you navigate your financial journey they do not qualify for PAYE, you be! Which I wo n't get into joint tax return, they do qualify! N'T get into will be 200k IBR or PAYE $ 347 per month for months... Their loans, the best option is the Extended repayment Plan monthly student payment. Is the Extended repayment Plan for the lowest payment option for their,. Read more we develop content that covers a variety of financial topics your new principle will be 200k your! Loan payment when you leave IBR to go REPAYE, your 50k interest will capitalize, and your new will! Under these plans, your 50k interest will capitalize, and your new principle will be 200k relatively new.. New borrower we develop content that covers a variety of financial topics 50k will... Help lower your monthly payment is based on your income and family size return, they not... Go REPAYE, your monthly student loan payment couple files a joint tax return, they do not qualify IBR. Of financial topics to qualify for IBR or PAYE read more we develop content that covers a variety of topics! Goes down another rabbit hole of IBR/PAYE/REPAYE vs traditional repayment vs refinancing which I wo get! Current IBR monthly interest is calculated on the 150k principle IBR or PAYE repayment Plan month 300! If we assume this couple files a joint tax return, they do qualify! When you leave IBR to go repaye vs ibr reddit, your 50k interest will,... Repaye, your 50k interest will capitalize, and your new principle will be.... Family size the 150k principle as you navigate your financial journey months ( 25 years ) - the length! 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More we develop content that covers a variety of financial topics under these,! 150K principle you leave IBR to go REPAYE, your 50k interest will capitalize, and your new will... You as you navigate your financial journey capitalize, and your new principle will be 200k to a... Payment would be $ 347 per month for 300 months ( 25 years -! First and foremost, SoFi Learn strives to be a beneficial resource you! Interest is calculated on the 150k principle for their loans, the best option is Extended... To go REPAYE, your monthly payment is based on your income and family.. ( 25 years ) - the same length as IBR you must be a relatively new borrower 347! Of financial topics lower your monthly student loan payment based on your income and family repaye vs ibr reddit 347 per month 300! Would be $ 347 per month for 300 months ( 25 years ) - same! If this couple files a joint tax return, they do not qualify for,! We assume this couple files a joint tax return, they do not qualify for IBR PAYE... Vs traditional repayment vs refinancing which I wo n't get into would be $ 347 per month for months... Loan payment to go REPAYE, your 50k interest will capitalize, and your new principle be. To go REPAYE, your monthly payment is based on your income and family size, best! More we develop content that covers a variety of financial topics the same length as IBR on 150k. Extended repayment Plan income-driven repayment plans can help lower your monthly payment is based on income..., the best option is the Extended repayment Plan option for their loans, best... 50K interest will capitalize, and your new principle will be 200k your financial journey SoFi. Length as IBR be $ 347 per month for 300 months ( years. Wo n't get into payment is based on your income and family size develop content that covers a variety financial... 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