Loan Repayment Planning Worksheet

Transcription

1 Lan Repayment Planning Wrksheet Date: Think f yur federal student lans as yur EDUCATION MORTGAGE. It is the financing yu ve needed t make this imprtant investment in yurself. The gd news is that with this mrtgage yur mnthly payments d NOT have t be based n hw much yu we. Repayment is mre flexible in that yur payments can be based n yur incme rather than n the amunt yu we. As such, repaying this mrtgage need nt prevent yu frm making ther financial decisins/chices such as investing fr retirement r saving t buy a new hme if yu re STRATEGIC when planning fr repayment f this unique frm f debt. Federal Student Lans (Direct/FFEL) are a very flexible and safe frm f credit. Yu shuld never have t miss a payment r default n FFEL/Direct Lan(s). Payment relief ptins exist (including pstpning repayment temprarily using a deferment r frbearance r reducing yur mnthly payment) that prvide financial safety nets if yu are experiencing financial hardship. Simply cntact yur lan servicer BEFORE yu miss the scheduled payment and explain why yu need help. Payments can be less than 10% f yur husehld s mnthly Adjusted Grss Incme (AGI) if yu chse the repayment plan that wuld give yu the lwest pssible mnthly payment. Flexible payment ptins are available fr FFEL/Direct student lans including incme-driven repayment plans: Revised Pay As Yu Earn (REPAYE) the newest 10% IDR plan Pay As Yu Earn (PAYE) Incme-Based Repayment (IBR) bth the new 10% ptin and the riginal 15% ptin Incme-Cntingent Repayment (ICR) the riginal IDR plan These incme-driven plans base yur mnthly lan payment n a percentage f yur husehld s adjusted grss incme (AGI), NOT the amunt f yur student lan debt. N ther frm f credit ffers this flexibility. As such, these incme-driven ptins can limit the pssible mnthly debt-t-incme rati impacts that culd reduce yur ability t brrw mney fr ther purpses such as buying a hme. Federal student lan debt culd be gne within 25 years r less even if it is nt fully repaid (frgiven amunt may be taxable). Prtin f debt culd be frgiven if nt fully repaid if using an incme-driven repayment plan. Prtin f qualifying debt culd be frgiven in 10 years if wrking in a qualifying public service psitin (PSLF). There are NO penalties fr prepayments n federal student lans. Yu have the right t make payments befre they are required r t pay extra amunts withut any penalty if yur gal is t reduce the ttal interest paid and/r t get the debt paid ff mre quickly. But always evaluate what yu are giving up financially t d s e.g., the extra mney yu pay tward yur lans culd be invested and be earning interest that is cmpunding. Remember, n ther frm f credit ffers this much chice, flexibility r financial safety during repayment. Cnsider hw yu can LEVERAGE the flexibility and safety nets built int yur federal student lans in rder t successfully repay yur educatinal debt withut sacrificing yur career aspiratins r pstpning the achievement f yur ther gals. Nte that it may nt be in yur best interest financially t pay ff yur federal student lans as fast as pssible if yu have better alternative uses fr yur extra funds frm an OPPORTUNITY COST perspective. Saving and/r investing thse extra funds fr the future culd be a better use f that mney due t the unique nature f federal student lans (FFEL/Direct). S be strategic! Think abut yur FINANCIAL GOALS and estimate yur mnthly BUDGET s that yu can determine hw much yu can affrd t pay n yur lans each mnth. Then use the fllwing fur steps t help develp yur lan repayment plan. SAVE TIME AND MONEY Sign up fr Aut-Pay The U.S. Department f Educatin currently ffers t reduce the interest rate by 0.25% n Direct Lans and any ther federal student lans it wns if yu sign up with yur lan servicer t have yur mnthly lan payments n these lans autmatically deducted frm a checking r savings accunt. Nte that all infrmatin prvided here is advisry and subject t change in federal law/federal regulatin.

2 STEP 1. Review yur lan histry Yu shuld knw the fllwing infrmatin abut each student lan yu have brrwed as yu plan fr repayment: Type f student lan NOTE: Interest typically accrues as COMPOUNDING interest n investments. Interest rate Amunt wed (principal lan balance + accrued interest) Nte that interest generally accrues as SIMPLE interest during the in-schl perid and during repayment--it is nt cmpunding. In ther wrds, interest is nt accruing n the accrued interest while in schl. It will capitalize (be added t the principal balance) nce when yur lans enter/reenter repayment and may capitalize again under certain cnditins but it des capitalize at regular timed intervals (i.e., it is nt cmpunding ). Lan servicer and hw t cntact them Date lan will enter r re-enter repayment and current status f the lan Available repayment ptins (if any) and hw much yu wuld have t pay each mnth under each available plan be strategic when picking yur plan; chse the payment plan that ffers the LOWEST required payment given the amunt f yur debt and yur husehld s incme this will maximize yur ability t cntrl hw yu spend yur mney each mnth yu can always pay extra twards yur lans if yu want t d s. Yu can btain this infrmatin abut yur FEDERAL student lans frm the Natinal Student Lan Data System at: NSLDS.ed.gv. Check yur credit reprt at: Annual Credit Reprt.cm fr infrmatin abut any PRIVATE student lans yu may have brrwed. STEP 2: Determine when repayment begins (Mre infrmatin is available at: StudentAid.gv and at StudentLans.gv.) Expected graduatin/separatin date: LOAN TYPE Direct Student/Staffrd (Subsidized and Unsubsidized) Grad PLUS Lans (1 st disbursed n/after 7/1/2008) START OF REPAYMENT COMMENTS AUTOMATIC 6-MONTH GRACE PERIOD befre lan repayment begins. NO GRACE PERIOD. Lan enters repayment when it is fully disbursed. It is in an autmatic in-schl deferment while yu are in schl. Lan will be placed in an autmatic 6-mnth pst-enrllment DEFERMENT nce yu are n lnger enrlled at least half time t align active repayment f the lan with that f the Direct/Staffrd Lans yu brrwed during the same perid f enrllment. Perkins AUTOMATIC 9-MONTH GRACE PERIOD befre lan repayment begins. Als has 6-mnth pst-deferment grace perid (cntact servicer fr details). HPSL/LDS/NSL/PCL AUTOMATIC GRACE PERIOD OF mnths. Cnslidatin NO GRACE PERIOD. Lan enters repayment as sn as it is fully disbursed. It is in an autmatic in-schl deferment while yu are in schl. Repayment resumes n the lan when yu graduate and in-schl deferment ends. See belw fr payment relief ptins. Other federal Institutinal/Private What if yu cannt affrd t make yur minimum mnthly lan payment? Yu shuld nt have t miss a payment n yur federal student lans. Payment relief ptins likely are available if yu cannt affrd t pay what is due. Yu must TAKE ACTION immediately cntact yur lan servicer befre yu miss the payment and explain why yu cannt affrd t make that payment. This will allw them t evaluate what ptin will best prvide the needed payment relief. If yu fllw all required steps in btaining payment relief it shuld nt negatively impact yur credit histry nr shuld it prevent yu frm getting payment relief at sme future pint in time, if needed. Cntact yur lan servicer(s) fr mre infrmatin. PAYMENT RELIEF OPTIONS Allws yu t: T apply: When t apply: ACTION PLAN: Temprarily pstpne repayment r reduces amunt yu must pay each mnth nce yur lan is in repayment, if eligible. DEFERMENT temprarily pstpnes mnthly payments, if eligible. FORBEARANCE temprarily pstpnes r reduces payments when experiencing financial hardship if yu dn't qualify fr a deferment. N interest subsidy. Chse r switch t a different repayment plan Fr example REVISED PAY AS YOU EARN (REPAYE) may prvide the payment relief yu need withut using deferment r frbearance if yur husehld adjusted grss incme (AGI) is lw. Cntact lan servicer BEFORE yu miss a payment and explain WHY yu need help t determine what ptin is best fr yu. Cmplete required applicatin materials. Cntinue making required mnthly lan payments until ntified therwise by lan servicer. As sn as yu realize yu need payment relief (and befre yu miss a scheduled payment).

3 STEP 3: Estimate mnthly payments and select yur repayment plan (Mre infrmatin is available at: StudentLans.gv.) Estimate yur mnthly payments n yur federal student lans using the Repayment Estimatr at: StudentLans.gv. Lan servicer(s) shuld cntact yu at least days befre yur lan(s) are scheduled t enter/re-enter repayment with infrmatin abut the repayment plans. Yu then must advise them what the plan yu want t use. If yu d nt d s, lans will be n the Standard payment plan. Yu have the right t change frm ne plan t anther at least nce every 12 mnths, if needed, by cntacting yur lan servicer(s). Yu have the right t make prepayments withut penalty. Cntact yur lan servicer(s) fr mre infrmatin. Fllwing charts describe the current payment plans available fr repaying Subsidized (Staffrd), Unsubsidized (Staffrd), Grad Plus, and Cnslidatin Lans. Mnthly payments n Perkins, HPSL, LDS and NSL lans are fixed and are equal t the greater f: (1) amrtizing the ttal lan amunt wed ver 120 mnths, r (2) minimum mnthly payment requirement fr that prgram. Cntact the servicer f yur lans(s) fr mre details abut payment plans/ptins. ORIGINAL Payment Plans Payments based n DEBT Standard Graduated Extended Fixed Extended Graduated INCOME-DRIVEN Payment Plans Payments based n INCOME REPAYE (Revised Pay As Yu Earn) PAYE (Pay As Yu Earn) Payment Structure Fixed Graduated Fixed Graduated Eligible Lans Maximum Term 120 mnths* (10 years) *Up t 30 years fr Cnslidatin Lans 120 mnths* (10 years) *Up t 30 years fr Cnslidatin Lans 300 mnths (25 years) 300 mnths (25 years) % f Disc. Incme Plan Descriptin Default plan plan that will be used until yu pt int a different plan. Fixed payments based n debt amrtized ver 120 mnths. Negative amrtizatin nt permitted. Payments qualify as eligible payments fr Public Service Lan Frgiveness (PSLF). Payments are adjusted incrementally based n debt amrtized ver 120 mnths. Negative amrtizatin nt permitted. Payments start ut lw, but ultimately are higher than under the Standard Plan. Fixed payments based n debt amrtized ver 300 mnths. Negative amrtizatin nt permitted. Payments tend t be abut 35-40% less than Standard 10-year payment plan. Payments are adjusted incrementally based n debt amrtized ver 300 mnths. Negative amrtizatin nt permitted. Interest nly payments initially but becme higher than Extended Fixed Plan. New Brrwer Requirement PFH Requirement DIRECT nly 10% NO NO DIRECT nly 10% IBR fr New Brrwers DIRECT and FFEL 10% IBR (Incme-Based Repayment) ICR (Incme Cntingent Repayment) (as f 10/1/2007) (as f 7/1/2014) DIRECT and FFEL 15% NO (payments capped) (payments capped) (payments capped) Frgiveness (taxable benefit) 20/25 years (UG nly/ug&grad) 20 years 20 years 25 years Subsidy All lans (N time limit) Sub lans nly (up t 3 yrs) Sub lans nly (up t 3 yrs) Sub lans nly (up t 3 yrs) DIRECT nly 20%* NO NO 25 years Payments will be adjusted up r dwn every 12 mnths based n hw incme/family size changes -- T apply fr these plans it is recmmended that yu cmplete the Incme-Driven Repayment Plan Request at StudentLans.gv apprximately 60 days prir t when the lan(s) enter r re-enter repayment. Yu must reapply/re-certify fr the incme-driven repayment (IDR) plan yu want t use every 12 mnths (servicer shuld request yu d s 90 days befre the end f yur current repayment cycle). Payments made using any f the Incme-Driven Repayment (IDR) plans qualify as eligible payments fr Public Service Lan Frgiveness (PSLF). Mnthly payments can be less than accrued interest each mnth ( negative amrtizatin permitted). Nn-DIRECT federal lans (i.e., FFEL, Perkins, HPSL, LDS, NSL) must be cnslidated (refinanced) int a Federal Direct Cnslidatin Lan t make thse lans eligible fr pssible repayment using the DIRECT-nly IDR plans (i.e., REPAYE, PAYE, ICR). Definitins: IDR = Incme-Driven Repayment (payments are based n percentage f husehld s annual discretinary incme rather than amunt f debt wed) Disc. Incme = Discretinary Incme -- that prtin f husehld s Adjusted Grss Incme (AGI) that exceeds 150% f the federal pverty guideline fr yur family size and state f residence husehld AGI includes spuse s incme if married and file jint tax return in all plans (excludes spuse s incme frm husehld AGI in PAYE and IBR plans if married, but file taxes separately) (* Payment calculatin slightly different fr ICR) New Brrwer = cannt have an utstanding balance n a DIRECT r FFEL lan when first new DIRECT/FFEL lan is brrwed n/after designated date PFH = Partial Financial Hardship yu must be experiencing a Partial Financial Hardship t enter this plan (PFH exists when payment based n incme is less than the Standard 10-year fixed payment amunt) --payments are capped at Standard 10-year payment amunt when PFH n lnger exists) Frgiveness = Remaining balance (principal and accrued interest) is frgiven/cancelled autmatically after specified number f years in an incme-driven repayment plan amunt frgiven/cancelled is taxable under current IRS cde Subsidy = Prtin f negative amrtizatin amunt is subsidized (negative amrtizatin ccurs whenever the scheduled mnthly lan payment is less than the amunt f interest that accrued that mnth n that lan) ACTION PLAN: Be strategic -- chse the plan that prvides LOWEST mnthly payment based n amunt f yur debt and yur husehld s incme. NOTE: When applying/recertifying t use an IDR plan, yu can answer NO t the LOOPHOLE QUESTION if yur CURRENT incme is ³ prir year s AGI.

4 STEP 4: Evaluate if yu need t cnslidate any f yur federal lans (Mre infrmatin is available at: StudentLans.gv.) Cnslidatin is the REFINANCING f ne r mre existing federal student lans (nt the COMBINING f lans). Yu can cnslidate (refinance) yur existing federal lans with a different federal lan (Federal Direct Cnslidatin Lan) r a private lan. In either case, yu are brrwing a new lan t pay ff ne r mre f yur existing federal student lans because yu feel it wuld smehw benefit yu. All federal student lans except the Primary Care Lan (PCL) are eligible t be refinanced thrugh the Federal Direct Cnslidatin Prgram. Private lans currently cannt be cnslidated in this prgram. Cnslidatin, hwever, des nt get yu a better interest rate; it actually increases the cst f the debt by a small amunt. Interest rate n the new lan is fixed it equals the weighted average f interest rates f lans being cnslidated then that weighted average is runded up t nearest 1/8 th percent. The runding up f the weighted average calculatin will increase the interest expense n the debt by a small amunt; yu als may end up paying mre ttal interest ver the life f repayment if yu take lnger t repay the lans yu cnslidate. Apply fr a Federal Direct Cnslidatin Lan nline at: StudentLans.gv Lans being cnslidated must be in grace, repayment, deferment r frbearance. Yu must include at least ne Federal Family Educatin Lan (FFEL) r Federal Direct Lan in the cnslidatin. As such, if yu are cnslidating Perkins/HPLS/LDS/NSL lan(s) yu must include at least ne FFEL r Direct lan in the cnslidatin. (Suggest it be the lan with the smallest balance due t weighted average nature f the interest rate calculatin.) Yu will be asked t select the cmpany yu want t use t service yur new Federal Direct Cnslidatin Lan when cmpleting the applicatin suggest yu use the same servicer that is currently servicing yur existing Federal Direct Lans. The lan servicer yu chse will prcess yur Federal Direct Cnslidatin Lan applicatin. Prcessing f yur applicatin culd take up t 60 days yu may need t cntinue making payments n the lan(s) yu are cnslidating if the lan(s) are in repayment; cntact yur lan servicer fr mre infrmatin. Yu can pt t delay funding f yur new cnslidatin lan until near the end f any remaining grace perid. Yu can brrw multiple cnslidatin lans, but yu must apply fr them ne at a time and can nly have ne applicatin in prcess at a time. Once all lans have been cnslidated int a single lan, n further cnslidatin is permitted. Yu can add eligible federal lans t an existing Federal Direct Cnslidatin Lan during the first 180 days after yu submit yur cnslidatin lan applicatin; cntact servicer f yur Cnslidatin Lan fr mre infrmatin. PERKINS LOAN NOTICE: Yu will lse the interest subsidy and any lan cancellatin benefits n yur Federal Perkins Lan(s) if yu cnslidate yur existing Perkins Lans cntact the servicer f yur Perkins Lan(s) fr mre infrmatin. Yu shuld NOT cnslidate yur Perkins Lan(s) if yu wuld be eligible fr any cancellatin benefits n thse lans as yu wuld lse thse benefits. Cnslidatin lans enter repayment as sn as they are funded; they d NOT have a grace perid. Repayment plans are the same as fr Direct Student (Staffrd) and Direct Grad PLUS Lans. CONSOLIDATION Refinancing ptin fr eligible federal student lans Allws yu t: A. Refinance nn-direct [e.g., FFEL/Perkins/HPSL/LDS/NSL lan(s)] federal student lans held by lender(s) ther than U.S. Department f Educatin (ED) int a new Federal Direct Cnslidatin Lan held by ED and serviced by a single servicer t increase cnvenience during repayment. B. Refinance nn-direct [e.g., FFEL/Perkins/HPSL/LDS/NSL lan(s)] in the Federal Direct Lan Prgram s that the debt can qualify ptentially fr REPAYE/PAYE payment plans as well as the Public Service Lan Frgiveness (PSLF) prgram. C. Refinance Staffrd lan(s) brrwed prir t July 1, 2006 that have a VARIABLE interest rate int a FIXED-rate Federal Direct Cnslidatin Lan. D. Obtain a lnger repayment term (up t maximum f 30 years) than wuld therwise exist based n ttal student lan debt if yu need t reduce the mnthly payment and the Incme-Driven Repayment (IDR) plans d nt prvide the flexibility yu need. E. Refinance FFEL/Perkins/HPSL/LDS/NSL lan(s) in the Federal Direct Cnslidatin Lan Prgram s that the debt can qualify fr the Extended Payment Plans (25-year amrtizatin). F. Release an endrser frm an existing Grad PLUS Lan by refinancing that lan with a Federal Direct Cnslidatin Lan (apprval f a Direct Cnslidatin Lan is nt subject t the adverse credit criteria f the Grad PLUS Lan). G. Refinance Perkins/HPSL/LDS/NSL Lans t take advantage f the 0.25% interest rate reductin that currently is ffered t brrwers wh repay their Direct Lans using the AUTO-PAY feature. H. Refinance lans that are in their GRACE PERIOD s that the debt can be frced int repayment sner (e.g., fr PSLF). T apply: G t: StudentLans.gv When t cnslidate: When lan(s) are in grace, repayment, deferment r frbearance. ACTION PLAN:

5 Interest Rate Chart Federal Student Lans (Mre infrmatin is available at: StudentAid.gv and at StudentLans.gv.) LOAN TYPE UNDERGRAD/GRAD-PROF DATE OF 1 st DISBURSEMENT INTEREST RATE Subsidized/Unsubsidized Direct/FFEL (Staffrd) Lans Undergrad/Grad-Prf July 1, 1998-June 30, 2006 VARIABLE RATE (Effective 7/1/2017 thru 6/30/2018) 2.68% (in-schl, grace, deferment) Subsidized Direct/FFEL (Staffrd) Lans Unsubsidized Direct/FFEL (Staffrd) Lans Subsidized and Unsubsidized Direct (Staffrd) Lans Subsidized Direct/FFEL (Staffrd) Lans Unsubsidized Direct/FFEL (Staffrd) Lans Undergrad July 1, 2006 June 30, % (fixed) July 1, 2008 June 30, % (fixed) July 1, 2009 June 30, % (fixed) July 1, 2010 June 30, % (fixed) July 1, 2011 June 30, % (fixed) Undergrad July 1, 2006 June 30, % (fixed) Undergrad July 1, 2013 June 30, % (fixed) July 1, 2014 June 30, % (fixed) July 1, 2015 June 30, % (fixed) July 1, 2016 June 30, % (fixed) July 1, 2017 June 30, % (fixed) July 1, 2018 June 30, % (fixed) Grad-Prf July 1, 2006 June 30, % (fixed) Grad-Prf July 1, 2006 June 30, % (fixed) July 1, 2013 June 30, % (in repayment, frbearance) 5.41% (fixed) July 1, 2014 June 30, % (fixed) July 1, 2015 June 30, % (fixed) July 1, 2016 June 30, % (fixed) July 1, 2017 June 30, % (fixed) July 1, 2018 June 30, % (fixed) FFEL Grad PLUS Lans Grad-Prf July 1, 2006 June 30, % (fixed) Direct Grad PLUS Lans Grad-Prf July 1, 2006 June 30, % (fixed) July 1, 2013 June 30, % (fixed) July 1, 2014 June 30, % (fixed) July 1, 2015 June 30, % (fixed) July 1, 2016 June 30, % (fixed) July 1, 2017 June 30, % (fixed) July 1, 2018 June 30, % (fixed) Direct/FFEL Cnslidatin Lans ALL ALL FIXED RATE Weighted average f interest rates f lans being cnslidated runded up t nearest 1/8 th percent. Perkins Lans (subsidized) ALL ALL 5.0% (fixed) HPSL, LDS, NSL, PCL (subsidized) ALL ALL 5.0% (fixed) Other Useful nline resurces prvided by the U.S. Department f Educatin: StudentAid.gv Infrmatin abut federal student aid prgrams ffered by U.S. Department f Educatin StudentLans.gv Repayment Estimatr Federal Direct Cnslidatin Lan applicatin Incme-Driven Repayment (IDR) Plan Request frm NSLDS.ed.gv Listing f all U.S. Department f Educatin federal student lans brrwed t date Infrmatin abut current lans including: Amunt wed (principal + accrued interest) Interest rate Date lan enters r entered repayment, and current lan status Lan servicer (including website address and tll-free phne number) StudentAid.gv/publicservice Infrmatin abut Public Service Lan Frgiveness (PSLF) prgram Emplyment Certificatin fr Public Service Lan Frgiveness frm Frequently Asked Questins (FAQs) abut PSLF

6 Incme-Driven Repayment (IDR) Plans Interest subsidy benefits during negative amrtizatin Interest Subsidy in IDR Plans Subsidy f interest during negative amrtizatin ( NEGATIVE AMORTIZATION ccurs whenever the amunt f yur scheduled mnthly lan payment is less than the amunt f interest that accrued that mnth n that lan.) Plans Subsidized Lans Unsubsidized Lans Revised Pay As Yu Earn (REPAYE) Pay As Yu Earn (PAYE) IBR fr New Brrwers Incme Based Repayment (IBR) Incme Cntingent Repayment (ICR) 100% f negative amrtizatin 50% thereafter 100% f negative amrtizatin nne thereafter 100% f negative amrtizatin nne thereafter 100% f negative amrtizatin nne thereafter 50% f negative amrtizatin during all years in plan REPAYE vs. PAYE What plan shuld yu cnsider chsing? REPAYE Negative amrtizatin exists (payment < accrued interest) Will receive mre interest subsidy PAYE Negative amrtizatin des NOT exist (payment accrued interest) Cnsider changing frm REPAYE t PAYE nce: Negative amrtizatin n lnger exists (payment accrued interest) Yu get married AND yu file separate federal tax returns PAYE payments wuld be based slely n yur AGI bth incmes wuld be used in REPAYE Yu have earned at least 19 years f payments that wuld qualify fr frgiveness f the debt Frgiveness culd ccur after 20 years f incme-driven payments rather than 25 years Yu are reaching the incme level where a Partial Financial Hardship wuld n lnger exist (payment based n 10% f AGI equals r exceeds 10-year Standard amunt) Switching t PAYE befre yu reach that incme level wuld allw yur PAYE payments t max ut at 10-year amunt nce a PFH n lnger exists REPAYE payments wuld keep increasing as incme increases (n payment cap in REPAYE) Changing plans causes utstanding accrued interest t be capitalized (added t principal balance). REPAYE vs. IBR (15%) What plan shuld yu cnsider chsing? REPAYE Single (r married filing jintly) and negative amrtizatin exists (payment < accrued interest) Payments will be based n 10% f husehld s AGI rather than 15% Will receive mre interest subsidy Cnsider changing frm REPAYE t IBR nce: IBR Yu re married and file federal tax returns separately and negative amrtizatin des nt exist (payment accrued interest) 15% f yur AGI alne (used in IBR) may equal less than 10% f yur cmbined AGI (used in REPAYE) Yu get married AND yu file separate federal tax returns 15% f yur AGI alne (used in IBR) may equal less than 10% f yur cmbined AGI (used in REPAYE) Yu are reaching the incme level where a Partial Financial Hardship wuld n lnger exist (payment based n 15% f AGI equals r exceeds 10-year Standard amunt) Switching t IBR befre yu reach that incme level wuld allw yur IBR payments t max ut at 10-year amunt nce a PFH n lnger exists REPAYE payments wuld keep increasing as incme increases (n payment cap in REPAYE) Changing plans causes utstanding accrued interest t be capitalized (added t principal balance).

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