Pay As You EarnRepayment Plan (PAYE)
Additional Information
Qualified Loan Types
- Direct Loan Borrowers (Subsidized and Unsubsidized)
- Direct PLUS Loans
- Direct Consolidation Loans without any PLUS Loans
Payment and Terms
- Payment capped at 10% of your discretionary income
- Needs updating of income and family size information even if there are no changes
- Payments are adjusted and recalculated if income and family size have changed
- For married couples, both you and your spouse’s income will be considered in the discretionary income calculation
- Any loan balance remaining will be forgiven after 20 years (undergraduate loans) or 25 years (graduate loans)
Nice To Know
- This is a good plan for those who wish to apply for PSLF
- You could pay more over time compared to the 10-year Standard Repayment Plan
- Income tax may be charged for any outstanding balance forgiven
Pay As You EarnRepayment Plan (PAYE)
- Usually for new borrowers who took out a federal student loan on or before October 1, 2007
- Direct Loans (Subsidized and Unsubsidized)
- Direct PLUS Loans
- Direct Consolidation Loans without any PLUS Loans
- Payment capped at 10% of your discretionary income, never beyond what you used to pay under the 10-year Standard Repayment Plan
- Needs updating of income and family size information even if there are no changes
- Payments are adjusted and recalculated if income and family size have changed
- For married couples, both you and your spouse’s income will be considered in the discretionary income calculation if filing status is jointly
- Any loan balance remaining will be forgiven after 20 years
- If your loan balance is higher than your income, you may qualify for this IDR
- This is a good plan for those who wish to apply for PSLF
- You could pay more over time compared to the 10-year Standard Repayment Plan
- Income tax may be charged for any outstanding balance forgiven