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PAYE vs. IBR: How these repayment plans stack up

It all depends on when you got your loan.

Updated Feb 20, 2021

Fact checked

The Pay As You Earn (PAYE) and Income-Based Repayment (IBR) Plans are very similar — but with a few differences, depending on when you borrowed. You’ll pay less with PAYE if your loans were issued between October 2011 and July 2014. But earlier loans are ineligible for PAYE, and more recent loans get the same deal on both plans.

How these federal repayment plans compare

	Pay As You Earn (PAYE) Repayment Plan	Income-Based Repayment (IBR) Plan
Best for...	Student borrowers with a high debt-to-income ratio who are either single or married and file taxes separately	Student borrowers looking for income-driven repayments on FFEL Loans that haven’t been consolidated
Eligible loans	Direct Subsidized Loans Direct Unsubsidized Loans Direct Graduate PLUS Loans Direct Consolidation Loans — can't include Direct or FFEL Parent PLUS Loans Subsidized Federal Stafford Loans* Unsubsidized Federal Stafford Loans* FFEL Graduate PLUS Loans* FFEL Consolidation Loans* — can't include FFEL Parent PLUS Loans Federal Perkins Loans* *Only qualify if consolidated with a Direct Consolidation Loan.	Direct Subsidized Loans Direct Unsubsidized Loans Direct Graduate PLUS Loans Direct Consolidation Loans — can't include Direct or FFEL Parent PLUS Loans Subsidized Federal Stafford Loans Unsubsidized Federal Stafford Loans FFEL Graduate PLUS Loans FFEL Consolidation Loans — can't include FFEL Parent PLUS Loans Federal Perkins Loans* *Only qualify if consolidated with a Direct Consolidation Loan.
How much you pay	10% of your monthly discretionary income — never more than what you’d pay on the Standard Repayment Plan	10% or 15% of your monthly discretionary income — depending on when your loan was first issued Never more than what you'd pay on the Standard Repayment Plan
Repayment Term	20 years	20 or 25 years — depending on when your loan was first issued
Eligibility requirements	Eligible loans High-enough debt-to-income ratio that repayments are lower than what they'd be on the Standard Repayment Plan Direct Loans disbursed after September 30, 2011 No outstanding federal student debt as of October 1, 2007	Eligible loans High-enough debt-to-income ratio that repayments are lower than what they'd be on the Standard Repayment Plan
Eligible for forgiveness at the end of the term
Eligible for Public Service Loan Forgiveness
Required to reapply each year	Yes	Yes
Pros	Repayments adjust with your income Cap on monthly repayments Same term for all loans Spousal income won't count if you file taxes separately	Repayments adjust with your income Cap on monthly repayments Spousal income won't count if you file taxes separately
Cons	Age limits for eligible loans Joint tax returns mean higher repayments More paperwork annually	Not open to parent borrowers Longer term and higher monthly repayments for older loans More paperwork annually
	Learn more	Learn more

Not sure if either of these plans are right for you? Learn about your other options with our guide to student loan repayment plans.

Interested in refinancing instead? Compare your options

Name	APR	Min. Credit Score	Loan amount	Loan Term
Purefy Student Loan Refinancing (Variable Rate)	1.88% to 5.54%	650	$5,000 - $300,000	5 to 20 years	Refinance all types of student loans — including federal and parent PLUS loans.	Get started More Info	Compare	loading Fetching your data...
Credible Student Loan Refinancing	1.80% to 7.74%	Good to excellent credit	Starting at $5,000	5 to 20 years	Get prequalified offers from top student loan refinancing providers in one place.	Get started More Info	Compare	loading Fetching your data...
SoFi Student Loan Refinancing Variable Rate (with Autopay)	1.74% to 7.24%	650	Starting at $5,000	5 to 20 years	A leader in student loan refinancing, SoFi can help you refinance your loans and pay them off sooner.	Get started More Info	Compare	loading Fetching your data...
Splash Financial Student Loan Refinancing	1.74% to 6.52%	650	Starting at $7,500	5 to 25 years	Save on your student loans with this market-leading newcomer.	Get started More Info	Compare	loading Fetching your data...
Education Loan Finance Student Loan Refinancing	1.86% to 6.01%	680	Starting at $15,000	5 to 20 years	Lower your student debt costs with manageable payments, affordable rates and flexible terms.	Get started More Info	Compare	loading Fetching your data...
Earnest Student Loan Refinancing	1.74% to 5.74% APR with autopay	650	$5,000 - $500,000	5 to 20 years	Get a tailored interest rate and repayment plan with no hidden fees.	Get started More Info	Compare	loading Fetching your data...
Supermoney student loan refinancing	Starting at 1.9%	No minimum credit score	$5,000 - $300,000	5 to 20 years	Compare options to combine both private and federal debts into one monthly payment.	Get started More Info	Compare	loading Fetching your data...

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Anna Serio

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Anna Serio is a trusted lending expert and certified Commercial Loan Officer who's published more than 1,000 articles on Finder to help Americans strengthen their financial literacy. A former editor of a newspaper in Beirut, Anna writes about personal, student, business and car loans. Today, digital publications like Business Insider, CNBC and the Simple Dollar feature her professional commentary, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020.

Income-Sensitive vs. Income-Based Repayment Plans REPAYE vs. PAYE: How these repayment plans stack up

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PAYE vs. IBR: How these repayment plans stack up

It all depends on when you got your loan.

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