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  • February 18, 2018, 05:56:57 PM

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Author Topic: RPAYE Repayment Strategy  (Read 185 times)

AndrewMartin

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RPAYE Repayment Strategy
« on: February 02, 2018, 12:36:03 PM »
For the revised pay as you earn option, since it forgives all of your unpaid interest for 3 years for subsidized loans, and half the unpaid interest for unsubsidized loans, would it be a good tactic to pay the RPAYE amount for 3 years, and save additional cash on top of that, then pay that cash savings as a large lump sum amount toward the principal once the 3 year interest forgiveness period is up? Wouldn't that allow you to pay it off faster than paying interest and principal for the first 3 years?

I'm not sure if I'm explaining the idea correctly, so just let me know if I should try to more clearly phrase the question.

TheCollegeInvestor

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Re: RPAYE Repayment Strategy
« Reply #1 on: February 03, 2018, 01:08:25 PM »
Hey Andrew,

Potentially - but the big flaw I see is where you'd get this extra cash to save. If you make enough money that your RePAYE payment isn't low, you're not going to have much of an interest subsidy (if any).

If your RePAYE payment is low and you get a big subsidy, well it's also because you're not making enough. If you're not making a lot of money, how are you going to save extra cash? Not to say it's impossible - but definitely tough.

Have you read this article on it: https://thecollegeinvestor.com/19246/repaye-student-loan-interest-subsidy/