Both the PAYE and IBR plans give me the same monthly payment amount and total to be paid. PAYE gives me a slightly higher end of payment balance.
I aim to seek PSLF, but do not have enough qualifying payments yet.
I know PAYE will phase out in 2028.
What are the main differences between the two plans and how should I decide which is best for me?
Either one I go with cuts my current payment under the standard repayment plan down by about 1/4 the amount. I can’t understand what the main differences between the two plans are, they seem about the same to me other than the fact that PAYE shows a higher end of payment balance (I don’t fully understand what that means either).
Should I choose PAYE or IBR?
byu/GamingRaccoon7 inStudentLoans
Posted by GamingRaccoon7
1 Comment
Choose IBR if all your loans were taken out after July 2014. This was called the “new” IBR. It is similar to PaaYE except you won’t have to switch plans when PAYE phases out in 2028. If you choose PAYE, when you switch to RAP (available after July 2026) or IBR, the interest you owe will capitalize. This means that they roll your unpaid interest into your principal and you pay interest on the interest.