Options to Reduce Federal Loan Payments - Pay As You Earn Tab

Pay As You Earn Repayment Plan (PAYE)

The Pay As You Earn Repayment Plan helps keep your monthly student loan payments affordable, and usually has the lowest monthly payment amount of the repayment plans that are based on your income and family size.  Payments are generally 10 percent of your discretionary income, but never more that the 10 year Standard Repayment Plan amount. If you need to make lower monthly payments, this plan may be for you. This repayment plan has a lower payment cap than the Income Based Repayment Plan and provides forgiveness after 20 years of on-time, Pay As You Earn payments.

You must be a new borrower as of Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011. You are a new borrower if you had no outstanding balance on a Direct Loan or FFEL Program loan as of Oct. 1, 2007, or had no outstanding balance on a Direct Loan or FFEL Program loan when you received a new loan on or after Oct. 1, 2007. Use the Federal Student Loan Repayment Calculator to see if this plan is right for you.