Scrolling Headlines:

Nick Mariano, Zach Oliveri transferring from UMass men’s lacrosse program -

Wednesday, July 1, 2015

Four months after banning Iranian students from certain graduate programs, UMass announces new measures to ensure compliance with U.S. law -

Wednesday, July 1, 2015

Justin King sentenced to eight to 12 years in prison -

Monday, June 29, 2015

Two future UMass hockey players selected in 2015 NHL Draft -

Saturday, June 27, 2015

Supreme Court ruling clears way for same-sex marriage nationwide -

Friday, June 26, 2015

Former UMass center Cady Lalanne taken 55th overall by Spurs in 2015 NBA Draft -

Friday, June 26, 2015

Second of four men found guilty on three counts of aggravated rape in 2012 UMass gang rape case -

Wednesday, June 24, 2015

Boston bomber speaks out for first time: ‘I am sorry for the lives I have taken’ -

Wednesday, June 24, 2015

King claims sex with woman was consensual during alleged 2012 gang rape -

Tuesday, June 23, 2015

Wrongful death suit filed in death of UMass student -

Thursday, June 18, 2015

Ryan Bamford uses online Q&A session to discuss UMass football conference search, renovation plans, cost of attendance -

Wednesday, June 17, 2015

Opening statements delivered, first witnesses called in second trial for alleged 2012 gang rape at UMass -

Wednesday, June 17, 2015

UMass Board of Trustees approves rise in tuition, student fees -

Wednesday, June 17, 2015

Former Minutewoman Quianna Diaz-Patterson named to Puerto Rican national softball team -

Tuesday, June 16, 2015

UMass rowing’s Jim Dietz inducted into CRCA Hall of Fame -

Tuesday, June 16, 2015

Jury selection begins Monday in second gang rape trial -

Monday, June 15, 2015

Students turn attention to state legislators as decision on UMass budget looms -

Saturday, June 13, 2015

Alumna and next director of Brooklyn Museum Anne Pasternak ‘created her own path’ -

Thursday, June 11, 2015

UMass graduate crowned head of 600-year-old Indian kingdom -

Thursday, June 11, 2015

Committee recommends UMass increase tuition, student fees for in-state undergraduates -

Wednesday, June 10, 2015

New option available to repay student debt

Flickr / DonkeyHotey

Students who borrow loans from the U.S. government to help pay for their education now have a new option when paying off their debt called the Pay As You Earn Repayment Plan, which will lower monthly federal student loan bills for eligible borrowers.

First announced by President Barack Obama in October 2011, Pay As You Earn caps payments for Federal Direct Student Loans at 10 percent of discretionary income for eligible borrowers. The U.S. Department of Education estimates that as many as 1.6 million Direct Loan borrowers could reduce their monthly payments, including teachers, nurses, first-responders and other lower-paying public service workers.

“We know many recent graduates are worried about repaying their student loans as our economy continues to recover, and now it’s easier than ever for student borrowers to lower monthly payments and stay on track,” said U.S. Secretary of Education Arne Duncan in a press release.

To qualify for Pay As You Earn, a borrower must have a partial financial hardship as defined by the U.S. Department of Education. A person has a partial financial hardship if their payments  under a 10-year Standard Repayment Plan are higher than the required payments under the Pay As You Earn plan.

A student must also be a new borrower as of October 2007 and the federal student loan debt must be high relative to the borrower’s income. The monthly payment amount is partially dependent on income and family size.

Under Pay As You Earn, a borrower may be eligible for 20-year forgiveness, which forgives any remaining student loan debt after 20 years of qualifying repayments. Furthermore, if a borrower is employed full-time by a public service organization and makes 10 years of on-time payments, they may be eligible to receive forgiveness of the remaining balance of their direct loans through the Public Service Loan Forgiveness Program. Any forgiveness of loans, though, is subject to taxation.

Because reduced payments under the plan mean repaying loans for a longer period of time, the total interest over the life of the loan will be higher than it may be under other repayment plans. However, if the monthly payment does not cover the interest that accumulates on the loans each month, the U.S. government will pay the accumulated interest for up to three years.

Ed Blaguszewski, Executive Director of News and Media Relations at UMass Amherst, said that the university fully supports Pay As You Earn and thinks that it will be helpful for students looking for a repayment plan that better suits their needs.

“Even for students that may not need 20 years, this could be helpful,” he said.

Blaguszewski said that Financial Aid Services only distributes loans, and it is the responsibility of the student to repay any loan debt left with them at the end of their education at UMass.

“We don’t say to students, do you want to repay the loan with the new plan or the old one,” he said. Blaguszewski added, though, that this new plan is something that students may want to look into.

Pat Hoff can be reached at pphoff@student.umass.edu.

Leave A Comment

You must be logged in to post a comment.