Pay As You Earn (PAYE) Repayment Plan: Who Qualifies and What You Get
Learn how the PAYE plan caps your monthly student loan payments based on your income and provides forgiveness after 20 years.
The Pay As You Earn (PAYE) Repayment Plan is a way to manage federal student loans by linking your monthly payments to how much you earn.
Who it's for
This plan is designed for borrowers who have a high ratio of debt compared to their income. To qualify, you must also meet specific requirements for new borrowers.
What you get
Your monthly loan payments are capped at 10% of your discretionary income. If you remain on the plan and make your payments, the remaining balance of your loans can be forgiven after 20 years.
What it costs you
While this plan helps lower monthly costs, it requires you to provide documentation to prove your financial situation and partial financial hardship.
The catch to know
Not every type of student loan is eligible for this specific plan. You should check your official dashboard to see if your specific loans qualify.
How to apply
- Log in to your student loan dashboard.
- Review your current loan types to ensure they are eligible.
- Follow the prompts to select the repayment plan.
- Submit any required financial documentation.