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PAYE vs. IBR: How these repayment plans stack up

It all depends on when you got your loan.

Anna Serio
Anna Serio

Updated

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

Data indicated here is updated regularly
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Discover Private Consolidation Loan
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$150,000
2.80% to 12.49%
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Splash Financial Student Loan Refinancing
Splash Financial Student Loan Refinancing
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Credible Student Loan Refinancing
Credible Student Loan Refinancing
Good to excellent credit
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1.99% to 9.24%
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Education Loan Finance Student Loan Refinancing
Education Loan Finance Student Loan Refinancing
680
None
2.39% to 5.99%
Lower your student debt costs with manageable payments, affordable rates and flexible terms.
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Earnest Student Loan Refinancing
Earnest Student Loan Refinancing
650
$500,000
1.99% to 5.64%
Get a tailored interest rate and repayment plan with no hidden fees.
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SoFi Student Loan Refinancing Variable Rate (with Autopay)
SoFi Student Loan Refinancing Variable Rate (with Autopay)
650
Full balance of your qualified education loans
2.25% to 6.09%
A leader in student loan refinancing, SoFi can help you refinance your loans and pay them off sooner.
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Purefy Student Loan Refinancing (Variable Rate)
Purefy Student Loan Refinancing (Variable Rate)
620
$300,000
2.27% to 7.49%
Refinance all types of student loans — including federal and parent PLUS loans.
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