Pay As You Earn Repayment Plan (PAYE)
| Repayment Type | Information | Eligible Loans | Monthly Payments | Quick Comparison |
|---|---|---|---|---|
| Pay As You Earn Repayment Plan (PAYE) | If your outstanding federal student loan debt is higher than your annual income or if it represents a significant portion of your annual income, you may want to repay your federal student loans under an income-driven repayment plan. |
Direct Subsidized and Unsubsidized Loans --- Direct PLUS loans made to students --- Direct Consolidation Loans that do not include (Direct or FFEL) PLUS loans made to parents |
Your maximum monthly payments will be 10 percent of discretionary income, the difference between your adjusted gross income and 150 percent of the poverty guideline for your family size and state of residence (other conditions apply). Your payments change as your income changes. Payments are made for up to 20 years. |
You must be a new borrower on or after Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011. You must have a partial financial hardship. Your monthly payments will be lower than payments under the 10-year standard plan. You'll pay more for your loan over time than you would under the 10-year standard plan. If you have not repaid your loan in full after you made the equivalent of 20 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven. You may have to pay income tax on any amount that is forgiven. |
