Repaye assists USC students with tuition

A new plan implemented by the Obama administration is helping college students repay their federal student loans. The plan, known as Revised Pay As You Earn, or REPAYE, expands the availability of the previous Pay As You Earn repayment plan to more student borrowers and modifies some of the terms of repayment.

Under the REPAYE plan, students’ monthly loan payments are prohibited from exceeding 10 percent of their discretionary income over the repayment period, and all balances are forgiven after 20 years of qualifying payments. With the new plan, payments increase and decrease as a borrower’s income changes, regardless of the degree of change in income. This is different from PAYE, which set a maximum amount that monthly payments could not exceed. The switch from PAYE to REPAYE also makes an income-driven repayment plan available to Direct Loan borrowers who may have previously been ineligible for PAYE.

In a press release, then-Secretary of Education Arne Duncan cited manageable student loan debt as a “central theme” of the Obama administration’s higher education policy.

“REPAYE is one of a number of key national economic policies this Administration has implemented to make America again the leader in college graduates in the world, while preventing student borrowers from facing unmanageable student loan debt,” Duncan said in the release.

Etienne Smith, a freshman studying print and digital journalism, thought that the program would be a good security blanket for those students who may not earn a lot after they graduate.

“I’m glad it’s available to me. There’s no guarantee that I will make tons of money in the future, especially going into journalism,” Smith said. “So I think it’s a good thing that I can have comfort knowing that my biggest problem won’t be student loans for the education that’s supposed to make me able to pay back my student loans.”

USC Financial Aid Dean Thomas McWhorter acknowledged the benefit of REPAYE in making student loans more affordable.

“Programs such as REPAYE will benefit students who may need help with keeping college loan repayments affordable,” McWhorter said. “While students who graduate from USC have a lower-than-average student loan debt and a default rate of less than 2 percent, we always look for ways to manage costs and maintain affordability. USC continues to provide financial aid to meet the full demonstrated need of our undergraduates.”

Boka Agboje, a junior majoring in interactive entertainment, has multiple federal student loans and felt that the new repayment options would prove beneficial for college students in general.

“It goes without saying that college is extraordinarily expensive,” Agboje said. “I feel like the cost of attending college has far outpaced the growing value of [it]. I appreciate the option of different payment plans, because different folks have different needs.”

Revised Pay As You Earn, announced Dec. 17, joins the original Pay As You Earn plan, the Income-Based Repayment Plan and the Income-Contingent Repayment Plan in a group of four income-driven payment options for federal student loan borrowers.

According to a Department of Education website, “the plans differ in terms of who qualifies, how much [the borrower has] to pay each month, the length of the repayment period, and the types of loans that can be repaid under the plan.”

With a low enough income, the site says, monthly payments could reach as low as $0 per month.