The Department of Education announced the Revised Pay As You Earn (REPAYE) rules for Student loan borrowers who cannot afford their regular payments. The two most important changes in the program are 1. the REPAYE rules apply to all government direct student loans, no matter how long ago they were issued, and not just to “new” borrowers and 2. the payment will be based upon 10% of “disposable income” (the difference between the borrowers adjusted gross income and the poverty line). People in the REPAYE program will be eligible for full debt forgiveness after 20 years. If they have graduate debt then the forgiveness period is extended to 25 years. If the borrower works in the public (government) or non-profit sector, they can receive a full debt forgiveness after only ten years. The one big problem with the new program is that it does include spousal income, even if they file desperate tax returns. That was not the case under some of the previous programs.
Source: ED