The Financial Empowerment Blog

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Student Loan Series: What Are My Income-Driven Repayment Plan Options?

Not all student loan payments are created equal. While standard repayment terms consist of 120 consecutive payments over 10 years, there are a number of different options for people to repay their debt with a much smaller monthly payment. 

Federal loan borrowers are able to take advantage of income-driven repayment options, which cap monthly payments as percentages of your income and extend the period of repayment to 20 or even 25 years. There are four options to consider:

  • Pay As You Earn (PAYE)
  • Revised Pay As You Earn (REPAYE)
  • Income-Based Repayment (IBR)
  • Income-Contingent Repayment (ICR)

Let’s see how each of these work and which might be right for you.

Pay As You Earn

PAYE caps your student loan payment to 10% of your discretionary income but it never exceeds the amount you would have paid in a standard 10-year repayment plan. This makes PAYE a good option for those consistently making a lower salary. 

The repayment term is 20 years, after which time the...

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5 Essential Home Buying Tips


The home buying process can be overwhelming, even for the financially savvy or experienced buyer. Stricter lending rules are partially to blame, but the bigger problem is you, dear buyer.

Yes, there are exceptions to every example, but during my years as a loan officer the biggest hurdle in 90% of delayed closings was the buyers’ lack of preparedness. I get it, it’s far more pleasant to parse Trulia or for your dream home than it is to spend hours organizing your financial documents. However, when you apply for the loan, don’t be surprised if it hits a roadblock because of your procrastination.

To illustrate my point, let me tell you a story that I’ve experienced more times than I care to recount:


The Story Of Joe

“Joe” wants to buy a house so, naturally, the first person he calls his real estate agent. The agent tells Joe he needs to get his financing in order, but Joe shows up to...

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