Pay As you Earn


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    Pay As you Earn student Loan Repayment Plan

    President Barack Obama first announced this plan in Oct. 2011 and it has become synonymous with the ‘Obama Student Loan Plan.’ This repayment plan, based on your monthly discretionary income, stems from a campaign promise Obama made as he courted young voters, telling them he would provide relief on their student loan payments and help better manage their debt.

    Financial Hardship

    If you are facing a partial financial hardship, this plan offers you the lowest monthly payment amount of the repayment plans based on your income, family size and state of residency. Monthly payments under the Pay As You Earn Plan are capped at 10 percent of your discretionary income.

    Once you qualify, you can continue to make payments under the plan even if your hardship no longer applies. An additional benefit of Obama’s Pay As You Earn Plan is that the remaining balance on your loan can be forgiven after 10 or 20 years, depending on certain qualifications. The forgiven amount may be taxed.

    The Pay As You Earn Plan is one of the flexible repayment options available when you consolidate your student loans. If your payments increase significantly, you can switch only to the Standard Plan to complete the principal payoff of your consolidated loan.

    The Department of Education estimates that 1.6 million Direct Loan borrowers will be able to lower their payments, putting a dent in the student loan deficit by using the new plan. We will guide you through every step of the way. Complete the short form above or call a professional today. 844-323-3328

    Plan Eligibility.

    All Stafford, Direct PLUS Loans made to students and consolidation loans that do not include loans made to parents are eligible for Pay As You Earn. Uninsured private loans, Parent PLUS Loans, loans that are in default, consolidation loans that repaid Parent PLUS Loans and Perkins Loans are not eligible. Federal Family Education Loans (FFEL) cannot be repaid under Pay As You Earn, but they are considered when determining if you have a partial financial hardship. You would qualify as having a partial financial hardship if your monthly payment on your eligible federal student loans under a 10-year Standard Repayment Plan is larger than the monthly amount you would be required to pay using Pay As You Earn. While this plan is similar to the Income based repayment plan, which caps monthly loan payments at 15 percent of discretionary income, Pay As You Earn caps payments at 10 percent. Discretionary income is determined by taking your adjusted gross income and deducting the poverty guidelines based on family size. Pay As You Earn monthly payment amounts for a range of incomes and family sizes using the poverty guidelines that were in effect as of January 2012, for the 48 contiguous states and the District of Columbia. Your payments may be adjusted annually based on changes to your income and family size, but it will never exceed the required payment on under the 10-year Standard Repayment Plan.

    Choosing Your Plan.

    Deciding which repayment plan is best for you can be difficult.We can help you review your options before committing to a New repayment plan . It is important to take action and address loans immediately — before your credit report is damaged by defaulted loans and interest builds on money you have not started to pay back. The worst penility would be that of wage garnishment which can be avoided by consolidation of your student loans. we are eager to help, simply complete the short form above or call a professional today. 844-323-3328