Federal student-loan rules are changing.Latest verified updates Reviewed October 11, 2026
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TRANSITION PLANNING

PAYE: what eligible borrowers need to know

PAYE generally calculates payments at 10% of discretionary income for 20 years, subject to eligibility rules. Current federal guidance says PAYE will end no later than July 1, 2028.

Last reviewed October 11, 2026Independent educational guideOfficial source linked below
Start with official eligibility

Plan rules depend on loan type, disbursement dates, consolidation history, and borrower-specific facts. Confirm eligibility with Federal Student Aid before applying.

PAYE remains relevant to eligible borrowers with loans disbursed before July 1, 2026, but current federal guidance says the plan will be eliminated no later than July 1, 2028. Borrowers should compare available alternatives before the transition deadline instead of assuming PAYE will remain an option through their full repayment period.

Payment calculationGenerally 10% of discretionary income ÷ 12, with an eligibility test and a payment cap linked to the 10-year Standard Plan.
Repayment period20 years
General availabilityEligible Direct Loans disbursed before July 1, 2026, plus PAYE program eligibility rules.

Payment calculation and eligibility

PAYE generally uses 10% of discretionary income and a 20-year repayment period. The calculated payment must be below what you would pay under the 10-year Standard Repayment Plan, and separate borrower-history rules apply. Not everyone with federal loans qualifies.

Why the 2028 deadline matters

Federal Student Aid says PAYE will end no later than July 1, 2028. If your expected repayment or forgiveness timeline extends beyond that date, compare future options now. The official calculator may label PAYE “Plan Ends” and can help compare payment, total cost, estimated discharge, and PSLF scenarios.

What to compare before switching

Compare PAYE with IBR and RAP if eligible. Consider the payment amount, interest, total amount paid, plan end date, IDR discharge timeline, and whether payments qualify toward PSLF. The best-looking monthly payment is not necessarily the best long-term result.

Step-by-step: what to do next

  1. Confirm you are currently enrolled in PAYE or otherwise eligible, and verify each loan’s disbursement date.
  2. Open the official Repayment Calculator and compare PAYE with plans that will remain available to you.
  3. Check whether your expected IDR-discharge or PSLF timeline extends beyond July 1, 2028.
  4. Read current servicer and Federal Student Aid notices for an official transition schedule.
  5. If you choose to switch, apply through StudentAid.gov and retain your confirmation.

Important cautions

  • PAYE is not available for new disbursements on or after July 1, 2026 under current guidance.
  • PAYE is scheduled to end no later than July 1, 2028.
  • Eligibility conditions include a payment comparison and borrower-history requirements.
  • Do not switch without reviewing how the move affects future payment counts and total cost.

Official source and next action

Use the official repayment-plan guidance before acting. Your servicer determines the payment due after processing and can confirm your account-specific status.

Open official Federal Student Aid guidance ↗

This page is educational material, not a determination of your eligibility or payment amount. Official source pages can change; revisit the linked source before relying on a deadline.