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The Senate has introduced a new bill, Repay Act of 2015, which would create a new repayment plan - Simplified Income-Driven Repayment (SIDR).
The good:
The good:
- It's a proposal
- Only affects NEW borrowers defined as having no Direct or FFELP (Federal Family Education Loan Program) loans or no outstanding balance on a loan made prior to July 1, 2015
- No proposed changes to Public Service Loan Forgiveness (PSLF)
- A tiered calculation to determine payment:
- 10% of the portion of discretionary income that is less than $25,000 (discretional income is still defined as AGI less 150% of the poverty line based on household size)
- plus 15% of remaining discretionary income
- A 25-year repayment period if more than $57,500 borrowed
- All household AGI considered regardless of tax filing status (Married Filing Jointly vs. Married Filing Separately)
- All accrued interest capitalized if you no longer qualify, you opt out, or forget to annually re-apply
- Any remaining balance forgiveness is considered taxable income
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