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| Revised Pay As You Earn | |
|---|---|
| Name | Revised Pay As You Earn |
| Other names | REPAYE |
| Introduced | 2015 |
| Country | United States |
| Administered by | U.S. Department of Education |
| Type | Income-driven repayment plan |
Revised Pay As You Earn Revised Pay As You Earn is a federal student loan repayment plan administered by the U.S. Department of Education and implemented after regulatory action under the Higher Education Act of 1965 and policy changes during the Obama administration; it affects borrowers with loans originated under programs overseen by the Federal Student Aid office, interacts with statutes such as the Bankruptcy Reform Act context, and was developed amid debates involving stakeholders like American Council on Education, National Association of Student Financial Aid Administrators, and members of Congress including Senator Lamar Alexander and Representative Bobby Scott.
REPAYE caps monthly payments for eligible borrowers as a percentage of discretionary income using income definitions influenced by rulings and guidance from the U.S. Department of Education, decisions from the Supreme Court of the United States on administrative authority, and analyses by entities such as the Congressional Budget Office, the Government Accountability Office, and researchers at Brookings Institution and the Urban Institute. The program’s structure references programmatic precedents like Pay As You Earn and Income-Based Repayment, and its parameters have been discussed in oversight hearings before the Senate Health, Education, Labor, and Pensions Committee and the House Committee on Education and Labor.
Eligibility for REPAYE connects to loan types administered under titles of the Higher Education Act of 1965, including Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct Consolidation Loans; borrowers holding Perkins Loans or Federal Family Education Loan Program liabilities held by commercial entities such as Navient or Nelnet may need consolidation through the William D. Ford Federal Direct Loan Program to enroll. Enrollment processes involve servicers contracted under metrics used by the U.S. Department of Education and compliance with certification requirements familiar to offices like the Internal Revenue Service for income documentation, with policy interactions involving stakeholders such as Consumer Financial Protection Bureau, American Federation of Teachers, and National Education Association.
REPAYE sets payment amounts based on discretionary income calculations derived from Internal Revenue Service definitions and adjusted gross income reporting used by Social Security Administration benefit calculations; standard terms include payment caps at a percentage of discretionary income and forgiveness of remaining balances after a designated period, with distinctions in forgiveness timelines for undergraduate versus graduate loan balances influenced by comparative models like Income-Contingent Repayment. Interest subsidy provisions and capitalization rules under REPAYE affect loan balances and have been topics in analyses by Federal Reserve Board economists, Moody's Analytics, and policy centers such as The Heritage Foundation.
REPAYE is compared routinely with Pay As You Earn, Income-Based Repayment, and Income-Contingent Repayment across metrics employed by evaluators from Brookings Institution, Urban Institute, American Enterprise Institute, and budget projections by the Congressional Budget Office; differences include eligibility criteria, payment percentage of discretionary income, interest capitalization rules, and forgiveness timelines, with servicer implementation contrasts observed between companies like Navient and MOHELA in administrative performance reviews by the Government Accountability Office.
Analysts from Brookings Institution, advocates such as The Institute for College Access & Success, and consumer protections experts at Consumer Financial Protection Bureau have critiqued REPAYE for complexity, potential for improper servicer actions echoing controversies involving Sallie Mae and Department of Education enforcement, and distributional outcomes examined in studies by National Bureau of Economic Research, Urban Institute, and watchdog reporting by ProPublica and The New York Times. Supporters including policy researchers at Center for American Progress and members of the House Committee on Education and Labor emphasize relief for borrowers while opponents represented by The Heritage Foundation and some members of the Senate Finance Committee argue fiscal exposure and moral hazard concerns.
REPAYE emerged from regulatory rulemaking under authorities in the Higher Education Act of 1965 with implementation during the Obama administration and subsequent guidance adjustments under the Trump administration and the Biden administration; congressional activity involving the plan has included hearings with testimony before the House Committee on Education and Labor and the Senate Health, Education, Labor, and Pensions Committee, budgetary scoring by the Congressional Budget Office, and legal scrutiny that engaged the Supreme Court of the United States and federal appellate courts over administrative rulemaking scope and Administrative Procedure Act challenges. Proposed statutory reforms and riders were considered in legislative vehicles associated with appropriations debates led by figures such as Speaker of the House and committee chairs, and implementation continues to involve coordination among U.S. Department of Education, federal loan servicers, and oversight entities like the Government Accountability Office.
Category:Student financial aid in the United States