Miami Student Loan Pay As You Earn Repayment Attorney
By the time they graduate from college, many people have student loan debt. But sometimes, those with student loans cannot manage their payments, and fall behind. If you have fallen behind in your federal student loan payments, or fear that you may soon do so, an income-contingent repayment plan may be useful. These plans, such as the Pay-As-You-Earn plan, tie your monthly loan payment to your income level, making repayment without default a realistic option. If you are worried about your federal student loans, an experienced Miami student loan repayment attorney can help you determine the best plan for managing your student debt.
Only new borrowers are eligible for a Pay-As-You-Earn plan (PAYE plan). New borrowers are those who had no outstanding federal student loan debt on Oct. 1, 2007, and took out a new Direct Loan on or after Oct. 1, 2011. Additionally, only certain types of loan are eligible for repayment under a PAYE plan:
- Direct Subsidized Loans;
- Direct Unsubsidized Loans;
- Direct PLUS Loans made to graduate or professional students; and
- Direct Consolidation Loans not repaying any PLUS loans made to parents.
Certain other loans are also eligible if they have been consolidated, meaning combined into a single new loan:
- Subsidized Federal Stafford Loans;
- Unsubsidized Federal Stafford Loans;
- FFEL PLUS Loans made to graduate or professional students;
- FFEL Consolidation Loans not repaying any PLUS loans made to parents; and
- Federal Perkins loans.
The repayment amount under a PAYE plan is calculated based on total student debt, income, and family size, and is recalculated yearly. Generally, it will be ten percent of your discretionary income. Discretionary income means the difference between a borrower’s income and 150 percent of the poverty line for his or her family size and state of residence. The repayment amount under a PAYE plan will never be more than the amount that you would pay under a 10-year Standard Repayment Plan.
There is an exemption for those who are at or below 150 percent of the poverty line. If you are in such economic circumstances, you will not be required to make monthly payments during the time you are below the poverty line for your family size and state of residence.
There is a 20-year repayment period for PAYE plans. This period includes both times of economic hardship deferment and periods of repayment under certain other repayment plans. If the loan is not paid in full by the expiration of that 20-year period, the remaining balance will be forgiven. Further, there is additional loan forgiveness for certain public employees. Under the Public Service Loan Forgiveness Program, any remaining balance on the loan will be forgiven after completing ten years of qualifying public service employment.
There are several different repayment plans available for federal student loans, and many other options, as well. A lawyer can help you understand the benefits and drawbacks of each plan, and determine which is the best for you and your situation. If you need help managing your student loans, please contact Miami student loan repayment attorney Julia Kefalinos at (305) 856-2713 to schedule a consultation.