Are there any income-driven repayment plans available for student loans?

In Alaska, there are income-driven repayment plans available for student loans. These plans usually rely on the borrower’s income and ability to pay. The payments under these plans are typically lower than the payments under the standard repayment plans. The most common plans are the Income-Based Repayment (IBR) Plan, Pay As You Earn Repayment Plan (PAYE Plan) and the Revised Pay As You Earn Plan (REPAYE Plan). The IBR Plan limits the borrower’s monthly payments to an amount based on their adjusted gross income (AGI), family size and loan balance. The payments usually increase with an increase in AGI, but never more than the 10-Year Standard Repayment Plan amount. Under the PAYE and REPAYE Plans, the monthly payment amount is 10% of the borrower’s discretionary income. Discretionary income is the difference between the borrower’s AGI and 150% of the poverty guidelines for their family size. If the borrower’s income is low enough, their payments could be as low as $0 per month. All these plans can provide financial relief by reducing monthly payments and reducing the overall cost of the loan over time. Eligible borrowers should evaluate the pros and cons of each plan before deciding which one is right for them. Borrowers should also be aware of the tax implications of these plans as the forgiven loan balance may be deemed taxable income. Borrowers should seek guidance from a qualified financial adviser before choosing a plan.

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Are there any income-driven repayment plans available for student loans?

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