I saw an article today from College Investor that there are new forthcoming federal regulations for PAYE that will be effective July 1, 2026 that will limit certain people from moving to PAYE.
From the article:
The regulations published in the Federal Register state that through June 30, 2028, a borrower may repay under PAYE only if they:
Have loans eligible for the plan
Are a "new borrower"
Elect to have their aggregate monthly payment recalculated at entry
Were repaying under PAYE on July 1, 2024
The rules also state: "A borrower who was repaying under the PAYE plan on or after July 1, 2024, and changes to a different repayment plan… may not re-enroll in the PAYE plan."
Has anyone knowledgeable, like Betsy, sounded off about this or provided guidance? PAYE was my next plan but, as someone with old IBR, this is really going to disrupt everything. This seems aimed at deliberately targeting/punishing people on SAVE, which is so ridiculous.
I’m nervous to put the article link in case this post gets flagged by filters, but I’ll put it in the comments.
New PAYE regulations forthcoming that would limit applications?
byu/PC_MeganS inStudentLoans
Posted by PC_MeganS
5 Comments
Here’s the article: https://thecollegeinvestor.com/80125/education-departments-new-rules-may-block-paye-enrollment-before-july-1-deadline/
And here’s the link to the federal register: https://public-inspection.federalregister.gov/2026-08556.pdf
Uhhh wtf. I was planning to switch to PAYE soon. Was on PAYE ever since I graduated and then switched to SAVE. Only other option is Old IBR. Fml
This would screw over MILLIONS of people on SAVE forbearance who plan to switch to PAYE after July 1st due to it being better than Old IBR (people who took out loans only AFTER 2014 are eligible for New IBR terms; if you took any loans out prior to 2014, you can only do Old IBR, which has worse terms than PAYE).
I’m pretty sure those are left over from the save package and therefore wouldn’t apply. The only new caveat for paye is they won’t let anyone in it after July 2027 and if course it goes away completely July 2028
If I recall correctly part of the issue with PAYE was it was created under the same mechanism that created ICR, REPAYE, and by extension SAVE right? And that underlying mechanism is what was attacked with the SAVE suit and the administration is applying the same logic to PAYE and ICR.