PAYE and ICR Student Loan Plans Reopen: Should You Enroll?

"As of Dec. 16, federal student loan borrowers can once again enroll in two income-driven repayment plans — Paye as You Earn (PAYE) and Income-Contingent Repayment (ICR), according to an Education Department spokesperson," NerdWallet reports.

..."Eligible SAVE borrowers aren’t building any credit toward the 10-year (120-payment) Public Service Loan Forgiveness (PSLF) finish line right now. Switching to PAYE will resume credit toward forgiveness. This impacts teachers, government workers and many nonprofit employees.

Don’t delay the switch. Time spent in the SAVE forbearance could shrink eventual forgiveness amounts for borrowers who are early in their PSLF journey, says Jill Desjean, senior policy analyst at the National Association of Student Financial Aid Administrators.

'Especially while their incomes might be lower early on, the longer they wait to make their payments on their loans, they're making more money, and their payments will be higher, meaning less forgiveness,' she says."

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Publication Date: 12/19/2024

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