If you're wondering about the value of Obama's student loan program, you're not alone. Many people find themselves looking for ways to learn more about the revised pay as you earn (REPAYE) scheme when they're figuring out how they're going to manage their student debt. The best way to describe Obama's student loan program is as follows: the repayment program caps the monthly bills that you will be expected to pay to up to ten percent of your income going towards student repayments. This also means that your debt should be forgiven following 20 years worth of repayments.

In the past, the terms of the student loan program were only available to people with low income, but now the Obama administration program has opened the initiative to anyone with a federal loan, regardless of their circumstances.

Remember That You're Not Instantly Forgiven:

One important thing to remember when getting involved with Obama's student loan program, is that your debt is not instantly forgiven. Rather than giving you instant access to a debt-free existence, the plan allows you to achieve long-term debt forgiveness after you have given 20 years of monthly payments to your student debt. In other words, regardless of how much investment you put into your education, or the amount of cash that is owed after your 20 years are over, you won't be asked to make any more payments after that time.

Once 20 years of payments have been made on your student loan, then regardless of how much money you have left to pay, your remaining debt will be wiped away and you can simply continue your life normally without having to worry anymore about your student loan. The only problem with this is that the Internal Revenue Service might regard the debt wiped away from your name as a form of taxable income, which means that you might end up in a higher tax bracket.

Who Applies for the Student Loan Program?

If you had a direct federal loan, then you can be entered into the Obama student loan scheme. This only applies if you are not in default, however. If you have an old-bank based loan that was taken from the federal family education program for loans, or a Perkin's loan, you may be able to consolidate your debt into a direct loan and take advantage of your eligibility for the REPAYE scheme. Parent plus loans aren't eligible.

Remember that although you don't need a low income to qualify for student loan forgiveness, the amount that you will be expected to pay will depend on your discretionary income. Your discretionary income is any money that you earn over 150% of the federal poverty line. In other words, if you have a low income then you are unlikely to be expected to pay much in terms of monthly repayments. On the other hand, if you have a higher income, then your repayments will be capped at a far greater rate, allowing you to pay more over time.