This goes down another rabbit hole of IBR/PAYE/REPAYE vs traditional repayment vs refinancing which I won't get into. If this couple files a joint tax return, they do not qualify for IBR or PAYE. PAYE is better for married borrowers when both spouses have an income and REPAYE is typically better for single borrowers when comparing PAYE vs. REPAYE. 5 minute read. > $30k/yr). Income-driven repayment plans can help lower your monthly student loan payment. You wouldn't be able to apply your 1st year qualifying payments to 4th year loans for example and the counter would reset each time. As I’m now doing my taxes and trying to decide how my wife and I should file (married jointly vs separately), I’ve come to the realization that under almost no circumstance does switching from IBR to REPAYE work in one’s favor if your spouse earns any meaningful amount of income (i.e. Compared to IBR or PAYE, REPAYE helps those with little household income and a large debt because the interest subsidy only exists on the gap between your accrued interest and your payment. And PAYE seems to have a slight edge over REPAYE and IBR, since it lowers your payments to 10% and sets your term at 20 years, rather than 25. The more you pay, the smaller the gap between your monthly payment and the monthly accrued interest, so the less interest subsidy you get. Your REPAYE monthly interest is calculated on the new 200k principle, so 200k*7%= 14k annually or $1,167 monthly not counting the REPAYE subsidy. I Switched to REPAYE and I Like It. The main reason is the 50% interest subsidy available under REPAYE that WAS NOT available under IBR … Under these plans, your monthly payment is based on your income and family size. (For RePAYE, as for PAYE and IBR, discretionary income is defined as the difference between your annual income and 150 percent of the federal poverty guideline for … Read more We develop content that covers a variety of financial topics. First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. If we assume this couple is looking for the lowest payment option for their loans, the best option is the Extended Repayment Plan. In my previous posts PSLF – Why REPAYE May NOT be the Best Plan and Pay as You Earn (PAYE) vs. Revised Pay as You Earn (REPAYE), I discussed the pros and cons of the REPAYE plan for repaying federal student loans. IDR plans include Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR) Plans. Depending on your earning trajectory and marriage status, a single doc or a physician with a non-working spouse could save money with REPAYE vs IBR, because REPAYE is based on 10% of your discretionary income (adjusted gross income minus the poverty line) and IBR is based on 15%. Your current IBR monthly interest is calculated on the 150k principle. But to qualify for PAYE, you must be a relatively new borrower. But with REPAYE coming into the picture, things become more complicated (and business increases for people like Jan since many more people are going to need his expertise to make the optimal choice.) Their payment would be $347 per month for 300 months (25 years) - the same length as IBR. But when you leave IBR to go REPAYE, your 50k interest will capitalize, and your new principle will be 200k. 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