In the latest episode of Credit 101, Episode 85 unveils a comprehensive guide to various payment plan options for managing student loan payments. Let’s delve into the diverse array of plans designed to suit different financial situations:

1. Pay As You Earn Repayment (PAYE) Plan:
   • Tailored for individuals with high debt relative to income, the PAYE plan calculates payments based on discretionary income. After 20 years of qualifying payments, any remaining balance may be forgiven.
2. Revised Pay As You Earn Repayment (REPAYE) Plan:
   • This plan considers 10% of discretionary income for payment calculation, extending forgiveness after 20 or 25 years of qualifying payments. REPAYE is open to all Direct Loan borrowers, regardless of income.
3. Income-Contingent Repayment (ICR) Plan:
   • The ICR plan calculates payments based on either 20% of discretionary income or the amount paid on a fixed 12-year repayment plan—loan forgiveness available after 25 years of qualifying payments.
4. Income-Sensitive Repayment (ISR) Plan:
   • Ideal for Federal Family Education Loan (FFEL) Program borrowers, the ISR plan adjusts payments based on annual income. While it offers flexibility, it’s important to note that forgiveness options are limited.
5. Extended Repayment Plan:
   • Suitable for Direct Loan and FFEL Program borrowers, this plan allows fixed or graduated payments over a 25-year term. Extended Repayment Plan may be an option for those with higher loan balances.

These five payment plans represent just a selection of the options available to borrowers. Each plan caters to specific financial circumstances, ensuring a tailored approach to managing student loan payments.