The new PAYE program, signed into law in June, caps loan payments at no more than 10% of income and forgives any unpaid balance after 20 years. The program expands access to these benefits to millions of student borrowers.
There are other options, too. The I.B.R., or income-based repayment, which also help borrowers to manage payments. The I.B.R. allows allows payment management, and covers both old and new loans, with a cap of no more that 15% of of income and balance forgiveness after 15 years.
Class of 2015 high school graduates originating new loans may access an updated I.B.R. with a 10% income cap and 20 year discharge limit.
I.B.R. and PAYE are designed to assist students whose total loans are larger than current income. On http://www.studentloans.gov, a student can apply online for the program most advantageous to her situation. Payments are based on an analysis of discretionary income.
But a word to the wise: individuals wishing to access either of these program must have loans in good standing.
Informed Educational Solutions