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Revised Pay As You Earn Repayment

Repayment Plan Eligibility and Application Information:

About the Plan

The Revised Pay As You Earn (REPAYE) Repayment Plan helps make student loan payments more affordable. This plan is available only to borrowers with Department of Education-owned loans (account number starts with an E) disbursed under the Federal Direct Loan Program (FDLP).

The REPAYE Repayment Plan caps regular monthly payments at 10% of your discretionary income or, if married, 10% of your combined discretionary income. You do not have to pay the accrued interest (interest not covered by your regular monthly payment amount) on subsidized loans for the first three consecutive years of repayment on REPAYE. After the first three consecutive years of repayment on subsidized loans, and for the full REPAYE repayment period on unsubsidized loans, you only have to pay 50% of accrued interest (interest not covered by your regular monthly payment amount). The three-year interest subsidy period is per loan for the life of your loans, not per repayment plan. For example, if you receive one year of the 100% interest subsidy benefit on IBR and switch to REPAYE, you will be eligible for as many as two consecutive years of the 100% interest subsidy benefit on REPAYE.

On the REPAYE Repayment Plan, the remaining student loan balance will be forgiven after you have made the equivalent of 20 years of qualifying payments if you have all undergraduate-level loans, or 25 years of qualifying payments if you have eligible graduate-level loans. Please note, your repayment term under this plan could be longer than 20 or 25 years if you postpone payments with a deferment or forbearance, or if you make payments under a different plan that does not meet qualifying criteria for forgiveness.

As with other income-driven repayment plans, REPAYE needs to be recertified every year. If you do not recertify, your loans will be exited from the REPAYE Plan and placed into the Alternative Repayment Plan. 

Alternative Repayment Plan

The Alternative Repayment Plan regular monthly payment amount is based on the outstanding balance at the time the student loan is exited from REPAYE.  The outstanding balance is spread out over a term of either 10 years or the amount of time remaining for forgiveness under REPAYE, whichever is less.

  • For borrowers with all undergraduate-level loans, the forgiveness term is 20 years (240 payments)
  • For borrowers with one or more graduate-level loans, the forgiveness term is 25 years (300 payments)

Example

  • A borrower’s loans exit REPAYE on 1/1/17 with a current balance of $25,000, a 6.8% interest rate, no loans obtained for graduate-level study, and no previous qualifying payments toward forgiveness.
  • The 12 payments the borrower made while on REPAYE are subtracted from the 240 payments required for forgiveness, which leaves the borrower with 19 years remaining until forgiveness on the REPAYE Plan. 
  • Since 10 years is less than 19 years, the Alternative Repayment Plan regular monthly payment amount is calculated using a 10-year (120-month) term, resulting in a regular monthly payment of $288.

Returning to REPAYE

You have the option of returning to REPAYE at any time by visiting StudentLoans.gov and completing an application. If your loans have already exited from the REPAYE Plan at the time you submit a new application, select this reason on the application: I am not in an income-driven repayment plan, but want to enter one. 

If you return to REPAYE from another repayment plan, you will be required to provide updated income documentation to cover the time you were not in the plan. We will use your updated income to determine what your regular monthly payment amount would have been if your loans had been on the REPAYE Plan during that time. If the calculated REPAYE amount is higher than the amount(s) you were billed while not in REPAYE, the new REPAYE regular monthly payment amount will be adjusted to make up the difference. The difference in your payment obligation is called the REPAYE increased amount.

How long will the REPAYE increased amount be added to the regular monthly payment amount?

When applicable, after your loan is returned to the REPAYE Plan, the REPAYE increased amount will be applied to your REPAYE regular monthly payment amount over the life of your loan until you receive loan forgiveness or pay your loan in full. If you pay extra, your regular monthly payment amount will be adjusted until the total amount of the adjustment is paid off.

Example:

  • A borrower’s loans exit REPAYE on 2/1/16, with a new regular monthly payment amount on a Standard Repayment Plan of $40.
  • The borrower requests re-entry to REPAYE on 2/1/17.
  • Using the borrower’s income documentation from the 12 months the loans were not on the REPAYE Repayment Plan, we calculate the regular monthly payment amount on REPAYE would have been $50 from 2/1/16 through 1/31/17.
  • The REPAYE $50 regular monthly payment amount is greater than the $40 scheduled payment amount on the Standard Repayment Plan by $10 per month. 
    • We multiply the difference of $10 by 12 months, for a total of $120.
    • The $120 is spread over regular monthly payments during the remaining term of the loan, until the borrower’s loans are forgiven.
    • In this example, the borrower does not have any loans for graduate-level study, the repayment term before earning forgiveness is 20 years (240 qualifying payments), and the borrower has made 24 qualifying payments to date. The term remaining before forgiveness on the REPAYE Repayment Plan is 216 months, with a payment due each month.
    • We divide the $120 difference by 216 months of remaining payments, for a total of $0.56 per month. 
    • The borrower’s current income is $22,000 with a family size of one.
    • 10% of the borrower’s discretionary income is $36.20.
    • When the borrower re-enters the REPAYE Repayment Plan, we add $36.20 to $0.56 to arrive at a new regular monthly payment amount of $36.76

How to Apply Online

To expedite the application process, apply online by logging in to StudentLoans.gov and clicking Complete Income-Driven Repayment Plan Request.

You can securely transfer your federal tax return information to us at StudentLoans.gov. Sending your tax information online may expedite our review of your income-driven repayment plan request.

Apply by Email, Fax, or Mail

If you would rather not apply online, review this document (Imprimir la versión en Español). Then download the application via the link in the document, and select this reason in Section 2, Question 1: I am not in an income-driven repayment plan, but want to enter one.

Be sure to sign and date your paper application (pages 1-4 are required), then return it with your income documentation to Nelnet. Email to SubmitMyForms@Nelnet.net, fax to 866.545.9196, or mail to:

Nelnet
Attn: Enrollment Processing
P.O. Box 82565
Lincoln, NE 68501-2565

How to Submit Your Annual Recertification

If your loans are already on the REPAYE Plan and you are submitting income documentation for your annual recertification, in Section 2, Question 1, choose the option: I am already in an income-driven repayment plan and am submitting documentation for the annual recalculation of my payment.

How to Request Recalculation of Your Payment Amount

If you wish to have your regular monthly payment amount on REPAYE recalculated because your income or family size recently changed, in Section 2, Question 1, select the option: I am already in an income-driven repayment plan and am submitting documentation early because I want my loan holder to recalculate my payment immediately.

Processing Your Request

Once we’ve received your complete application and income documentation, we will review your request. If you do not qualify for the income-driven repayment plan you selected, we will apply the plan that best fits your financial needs based upon lowest payment and qualifying forgiveness term. We will send you a letter within 15 business days with the outcome of our review.

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