April 18, 2023

What Does Biden’s New Modified REPAYE Plan Mean for My Student Loans?


Between the end of COVID-19 relief, Biden’s Student Loan Forgiveness Initiative, and the IDR Account Adjustment, student loan repayment has seen a serious shake-up.

As we draw nearer to the likely end of the student loan payment pause, understanding Biden’s latest initiative, the REPAYE plan, could be an essential part of your repayment strategy. This modified Income Based Repayment (IBR) plan falls under the IDR umbrella, but enrollment and qualifications differ slightly from previous IDR plans.

Read on to learn about the updated REPAYE and what it might mean for your student loans.

What is REPAYE?

In January 2023, the Department of Education proposed changes to student loan income-driven repayment plans, making it more straightforward and affordable for federal borrowers to repay their loans.

Called REPAYE, or Revised Pay As You Earn Repayment Plan, this plan could significantly reduce monthly payments and shorten repayment timelines for some borrowers. It’s also meant to simplify repayment options for borrowers instead of having them parse through the four existing repayment plans.

How Is REPAYE Different From Other IDR?

The REPAYE proposal augments the already in-place IDR (Income-Driven Repayment) plan for federal student loan borrowers. Here’s how repayment would change for qualifying borrowers.

5% discretionary income payments for undergrads

Previously under IDR, monthly student loan payments for undergraduates were capped at 10% of a borrower’s discretionary income, with discretionary income defined as “any income above 150% of the poverty guideline amount for their state.”

Under the new REPAYE plan, monthly payments would be capped at 5% of a borrower’s monthly discretionary income for undergraduate loans and 10% for graduate loans. The discretionary income standard would also rise to 225%. That means the amount of a borrower’s income used to calculate monthly payments would be significantly reduced compared to the previous plan.

$0 monthly payments

Single borrowers who make less than $30,500 annually and households of four who make $62,400 annually would make $0 monthly payments towards their loans. If the borrower qualifies for the $0 monthly payments, the change would also mean no interest will accrue on their owed balance. What’s more, these $0 monthly payments would still count towards IDR or PSLF programs.

With regular payments, no interest accrual

Under old IDR plans, the borrower's monthly payments sometimes were less than the monthly interest building on the loan. That meant even if a borrower made their regular monthly payment, their balance would continue to grow.

Under modified REPAYE guidelines, interest won't accumulate on the loan if a borrower makes regular, on-time monthly payments.

Faster forgiveness

Under the current REPAYE plan, borrowers can have their loan balances forgiven after 20 years of regular monthly payments (25 years for graduate loans).

Under the newly proposed REPAYE guidelines, borrowers who take out loans of $12,000 or less would be eligible for forgiveness after 10 years of repayment. For every additional $1,000 borrowed, another year of repayment would be added for forgiveness.

For example, if someone borrowed $15,000, they would be eligible for forgiveness after 15 years of regular payments.

Additionally, REPAYE would loosen the guidelines around deferment and forgiveness. It would also allow borrowers to consolidate their loans without compromising their forgiveness plan.


Under the new guidelines, delinquent borrowers at least 75 behind on payment would be auto-enrolled in the program. That means they’d automatically be on a plan with the lowest monthly payment.

Who Can Benefit from REPAYE?

Both graduate and undergraduate federal loan borrowers qualify for the new REPAYE plan. However, parents enrolled in Parent PLUS loans do not qualify for REPAYE.

While Biden’s Student Loan Forgiveness Initiative has been challenged in court and largely placed on hold, these proposed changes to REPAYE would provide some much-needed relief for borrowers as the student loan payment freeze ends. Some may even consider the changes to REPAYE to be their own form of forgiveness.

That’s because for qualifying borrowers, it would reduce monthly payments and put borrowers in the past to full forgiveness faster. It also gives borrowers in default a chance to resume payments with little legwork on their end.

How Can You Enroll in the Modified REPAYE?

These changes to IDR are exciting for many but also confusing. Some existing IDR programs are being phased out, others will stay, and some require enrollment.

Let’s break down the existing repayments plans, which will automatically reflect on your loan repayment, and which require an application:

ProgramWhat is it?Auto-EnrollmentApplication RequiredPhasing Out
Standard PlanThe "default" repayment plan for federal student loan holders, with fixed monthly payments. Borrowers are expected to repay in 10 years.Yes  
IBRMonthly payments are capped at 10% of your discretionary income. Yes 
REPAYEMonthly payments are capped at 5% of your discretionary income for undergrad loans, and 10% of your discretionary income for graduate loans.Yes, for at-risk* borrowersYes 
PAYEPayments are capped at 10% of the borrower's discretionary income, divided by 12. Payment is never more than the 10-year Standard Repayment. Yes 
ICRMonthly payments are either: what a borrower would pay on a repayment plan with a fixed monthly payment over 12 years based on income or 20% of a borrower's discretionary income (divided by 12). YesYes, with the exception of Parent PLUS loans

*”At-risk” refers to borrowers who have defaulted on their loans.

The changes to REPAYE are set to go into effect this summer.

What’s Next?

While the REPAYE proposal has been announced, the Department of Education hasn’t offered specifics on when borrowers could enroll. It's unlikely borrowers will be able to enroll in the new program before the student loan freeze ends.

Not sure which IDR plan is the right fit for you? Use Chipper to compare the plans side-by-side  to find the one that makes the most sense for your finances. Figure out the lowest payment, highest forgiveness amount, and shortest payoff period with Chipper.

Use Chipper for Lower Payments

Chipper can help you find a student loan repayment plan that actually fits into your budget. You simply fill out your information and link your student loan account for us to generate your options in seconds. We help the average student loan borrower save over $300 a month off their student loan monthly payment. Lowering your monthly payment plan can game changing for your personal finance and can be done in minutes! Sign up for Chipper today to get on track with your student loans.

Use Chipper for The Best Path to Forgiveness

Finding your path to student loan forgiveness is easier than ever before. Chipper helps members find better Income-Driven Repayment (IDR) plans every day. Once enrolled in an eligible repayment plan, we can help you explore your forgiveness options and understand your path towards forgiveness. Sign up with Chipper today and get on track with your student loans.

Use Chipper for Round-Ups

Paying off your student loans doesn’t have to be a long and painful journey. Round-Ups are a way to directly pay off your loans with your everyday spending! By tracking your linked spending account(s), we will calculate the rounded up amount from each transaction in a week (IE spending $4.28 would add $0.72 to the weekly amount). We then initiate a payment towards your student loan for the weekly amount. Get chipping away on your student loans with Chipper today.

Use Chipper for Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness (PSLF) program was created to provide relief to borrowers aiding the public sector. Unfortunately, 30% of applicants are denied due to incorrect paperwork. We can help! Chipper was created to solve this issue by assisting borrowers in understanding their options as well as allowing forgiveness eligible users enroll into the best forgiveness program available. Sign up for Chipper today to see your student loan forgiveness options and get the forgiveness you deserve.

Use Chipper for Teacher Loan Forgiveness (TLF)

The Teacher Loan Forgiveness (TLF) program was created to enable teachers working in Title 1 schools to receive student loan forgiveness of up to $17,500 (depending on their teaching subject). Chipper has helped teachers from all over the country qualify for TLF program and can help you get the forgiveness you deserve today. Find out if you qualify for forgiveness in minutes with our employer search tool.

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