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PAYE vs REPAYE: The Federal Repayment Plan Showdown

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Before You Read, Lower Your Student Payment

It’s that quick & easy — really. Our free tool checks a network of top refinance lenders and shows you options in one easy chart.

Checking rates takes 2 minutes with no impact on your credit
Federal & private loans are eligible
No maximum loan amount

Having federal student loans comes with a lot of benefits. Most options don’t require a credit check, so almost everyone can borrow. Federal loans come with a six-month grace period, so you’ll start paying back your loans after you graduate (and hopefully land a stellar new job). Federal loans also come with the option to repay with income-driven repayment (IDR) plans.

IDR plans allow you to pay back your loans on a track that’s best for your finances and family size. Your monthly payment amount is based on your discretionary income and the number of people in your household. Lowering your payment through an income-driven repayment plan like PAYE or REPAYE means you’re less likely to miss payments. You’ll also be able to steadily build up your credit score, and if your loan still isn’t paid off after 20 or 25 years the balance is forgiven.

There are a few different IDR plans, including:

  • Income-based repayment (IBR)
  • Pay as you earn (PAYE)
  • Revised pay as you earn (REPAYE)
  • Income-contingent repayment (ICR)

Many people have trouble deciding between two of the major plans: PAYE vs. REPAYE. They are similar in many ways, so make sure you know the difference between both plans before choosing one.

PAYE vs. REPAYE: The similarities

Both PAYE and REPAYE are IDR plans that set your monthly payment at no more than 10% of your discretionary income. The government determines your discretionary income by taking the difference between your annual income and 150% of the poverty-level guideline for your family size and state.

And both PAYE and REPAYE set the same repayment timeline for loans taken out for your undergraduate degree. If you haven’t completed your undergraduate loan repayment after 20 years for either PAYE or REPAYE, your loans are forgiven. If you have loans that you took out for graduate or professional school, REPAYE adds an extra 5 years to that figure.

PAYE and REPAYE plans allow the same types loans to qualify. Parent PLUS loans aren’t eligible for either plan, but the following loan types are qualified:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans (not made to parents)
  • Direct Consolidation Loans (no loans that include PLUS Loans to parents)

Some Federal Stafford Loans might be eligible if they’re consolidated first.

PAYE vs. REPAYE: The differences

While the names are quite similar, these plans have some big differences to look out for:

  • REPAYE has extra repayment time. If you received qualifying loans during graduate or professional study, you have 25 years before you get forgiveness, compared to 20 years with PAYE. If you took out loans for grad school, PAYE may be a better option.
  • PAYE is for new borrowers only. Your eligibility for PAYE is directly tied to when you took out your federal student loans. Generally speaking, if you received your loans after October 1, 2011 you qualify.
  • PAYE will cap your repayment amount. If you’re set to owe more each month under PAYE than you would under the Standard Repayment Plan, you wouldn’t qualify for PAYE in the first place. Under PAYE, you’ll never owe more than you would on the standard plan.
  • REPAYE considers both spouses incomes. Unless you are separated from your spouse, REPAYE will look at your spouse’s income if you are married – even if you file taxes separately. If your spouse’s income is significant, it will increase your monthly payment. With PAYE, you can avoid having your spouse’s income considered by filing taxes separately. As such, it can be a better option for married individuals.
  • PAYE has an income requirement to qualify. For PAYE, you need a low income relative to your total student debt load to qualify. REPAYE has no such requirement.
  • PAYE and REPAYE cover your unpaid interest differently. With PAYE, the government will cover all unpaid interest that accrues on your subsidized loans in the first 3 years of repayment. REPAYE covers that as well, but there’s an extra bonus – the government will pay 50% of your unpaid interest on unsubsidized loans during all periods, and 50% of the interest on your subsidized loans after the first three years of full coverage are up.

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PAYE vs. REPAYE: Which one is right for you?

In general, PAYE is the preferred option, provided that your loans aren’t too old and your income isn’t too high to qualify. PAYE caps your payments and is better for married borrowers — even if you’re not married yet, this is something to think about if you’ll be on the plan for a long time. REPAYE has no payment cap, so if you (or your spouse’s) income increases, you could end up paying more per month than you would on the standard 10-year plan.

That said, REPAYE may be a reasonable option for single borrowers who don’t expect a significant increase in income. The government’s coverage of your unpaid interest is a little better with REPAYE, so this might be a good situation to take advantage of that — especially if you only plan on going on an income-driven plan for a few years while you get your feet on the ground.

Do the math for both plans and consider a few different factors, like:

  • Are you married? If so, both incomes are considered under REPAYE. A PAYE plan would limit this if you and your spouse file taxes separately.
  • Do you have lots of student loan debt? Different career fields and majors could mean taking on more loan debt than others. A capped repayment plan through PAYE could lower your monthly payments.
  • Will you hit the income cap on PAYE? If your monthly payments on PAYE will exceed your monthly payment on the Standard Repayment Plan, your only choice is REPAYE.

Alternative plans to PAYE and REPAYE

In general, IDR plans are crafted to help you make your monthly payments on time without falling behind, crushing your credit score, and putting your loans in default. But PAYE and REPAYE aren’t the only options around. Here are a few alternatives:

Direct Consolidation Loan — You can consolidate your loans and have one manageable payment each month rather than many. These loans are only offered to federal student loan borrowers; private student loans don’t qualify. When you consolidate student loans, you can extend your repayment term up to 30 years total, which will lower your monthly payment.

Student Loan Refinancing — If you have a mix of private and federal student loans, or you have strong credit and you’re looking to get a lower interest rate, you can try refinancing. With refinancing, you take a new loan out to pay off your outstanding loans. You’ll then have one payment each month for the new loan, with a new interest rate and term based on your credit score and income. But keep in mind that refinancing doesn’t guarantee you a lower interest rate or better loan terms than what you currently have. You can use Purefy to find the best rate for you.

Other IDR plans — Income-Based Repayment (IBR) caps your repayment amount to 10% of your discretionary income and no more than what you would pay on a Standard Repayment Plan. Income-Contingent Repayment (ICR) caps your payment at 20% of your discretionary income. ICR is the only income-driven repayment plan available for Direct PLUS Loans for parents.

Even though many IDR plans are similar, they have small differences. Make sure you consider these differences before choosing the right plan.

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Ascent Rate Disclosure

Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills or DR Bank, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentStudentLoans.com/Ts&Cs.

Rates are effective as of 12/1/2023 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized back account each month. For Ascent rates and repayment examples please visit: www.AscentStudentLoans.com/Rates.

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SoFi Rate Disclosure

3 SoFi Rate Disclosure:

Fixed rates range from 4.49% APR to 8.99% APR with a 0.25% autopay discount. Variable rates from 5.09% APR to 8.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.

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Earnest Rate Disclosure

2 Earnest Rate Disclosure:


Actual rate and available repayment terms will vary based on your income. Fixed rates range from 5.44% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.97% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.

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THIS IS AN ADVERTISEMENT. YOU ARE NOT REQUIRED TO MAKE ANY PAYMENT OR TAKE ANY OTHER ACTION IN RESPONSE TO THIS OFFER.

Earnest Rate Disclosure

Rates displayed include the 0.25% Auto Pay discount. You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 4.67% APR to 16.15% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.64% APR to 16.45% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan origination loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. Although the rate will vary after you are approved, it will never exceed 36% (the maximum allowable for this loan). Please note, Earnest Private Student Loans are not available in Nevada. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.

Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.

Earnest clients may skip one payment every 12 months. Your first request to skip a payment can be made once you’ve made at least 6 months of consecutive on-time payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Please be aware that a skipped payment does count toward the forbearance limits. Please note that skipping a payment is not guaranteed and is at Earnest’s discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.

Loan Eligibility criteria: Eligible students must: 1) For college Freshmen, Sophomores and Juniors, attend, or be enrolled to attend, a Title IV school full-time. For college Seniors and Graduate students, attend, or be enrolled to attend, a Title IV school at least half-time; and 2) be pursuing a Bachelor’s or Graduate degree. Earnest private student loans are subject to credit qualification, completion of a loan application, verification of application information, self-certification of loan amount, and school certification.

Responsible borrowing tip: Explore all scholarship, grant and federal options before applying for a private loan.

Earnest Private Student Loans are made by One American Bank, Member FDIC. One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104.

Earnest loans are serviced by Earnest Operations LLC, 535 Mission St., Suite 1663 San Francisco, CA 94105, NMLS #1204917, with support From Navient Solutions, LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America.

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ELFI Rate Disclosure

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Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. See Terms & Conditions. Interest rates current as of 10/13/2023. The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. Interest rates may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. Rates are subject to change.

ELFI Rate Disclosure

Education Loan Finance is a nationwide student loan provider offered by Tennessee based SouthEast Bank. ELFI is designed to assist students financially with receiving their education. Subject to credit approval. See Terms & Conditions. Interest rates current as of 12/11/2023. Variable interest rates may increase after closing but will never exceed 18.00%. Interest rates may also differ from the rates shown above. The term of your loan, financial history, and other factors, including your cosigner’s (if any) financial history can affect the interest rate. For example, a 10-year loan with a fixed rate of 7% would have 120 payments of $11.61 per $1,000 borrowed. Rates are subject to change.

College Ave Rate Disclosure

College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.
Minimum loan amount $1,000, as certified by your school and less any other financial aid you might receive.
This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 1/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.

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