Will PAYE Student Loans Go Away? What Borrowers Need to Know as Plans Reopen

If you’re wondering is paye going away, the short answer is: not right now. In fact, the federal government just reopened enrollment for PAYE (Pay As You Earn) and ICR (Income-Contingent Repayment) in late 2024—two income-driven repayment plans that had been largely closed off to new borrowers. But the situation is more complex than a simple yes or no. Here’s what you need to understand about PAYE’s future and whether switching from other plans makes sense for your situation.

PAYE Isn’t Going Away—Here’s Why

The question of whether is paye going away gained urgency when the U.S. Education Department shut down new PAYE enrollment in mid-2024. However, recent legal challenges have forced the department to reverse course. The newest repayment plan, called SAVE (Saving on a Valuable Education), faced multiple lawsuits that blocked its implementation and left 8 million borrowers stuck in an indefinite payment pause. As a workaround, the department reopened PAYE and ICR to give these stranded borrowers alternatives.

This means PAYE remains available, at least until July 1, 2027—the current enrollment deadline under federal guidance. While future administrations could potentially modify or discontinue any repayment plan, PAYE has been around since 2012 and remains the most stable option among income-driven plans. The reason it’s more stable than SAVE is simple: PAYE has survived longer and has fewer legal vulnerabilities.

So while you might occasionally hear speculation about plans disappearing, PAYE going away would require new federal legislation or policy shifts. For now, it’s a viable pathway for millions of borrowers seeking manageable monthly payments tied to their income.

When PAYE Makes Sense: Who Should Switch from SAVE?

Just because PAYE is available doesn’t mean everyone should jump ship from SAVE’s payment pause. The decision depends entirely on your financial goals and timeline.

Switch to PAYE if you’re chasing loan forgiveness. This is the strongest reason to make a move. Right now, SAVE borrowers aren’t earning any progress toward Public Service Loan Forgiveness (PSLF) or general income-driven repayment (IDR) forgiveness. Every month you stay in the pause is a month you’re not building credit toward the 10-year or 20-year forgiveness thresholds.

If you’re a teacher, government worker, or nonprofit employee pursuing PSLF, switching to PAYE immediately restarts your forgiveness clock. This matters especially if you’re early in your career when income is lower and payments are smaller. The longer you delay, the more your income grows, and the higher your future payments become—meaning less debt forgiven at the end.

PAYE also offers faster forgiveness than some alternatives. You can reach IDR forgiveness after 20 years on PAYE, compared to 25 years on ICR or the standard timeline for other plans. And if you have graduate school loans, PAYE can cut your forgiveness timeline by five years.

Consider staying in SAVE if you don’t need forgiveness. The interest-free payment pause is extraordinarily valuable if your goal is simply to pay down debt quickly or redirect money toward other financial priorities. With no interest accruing, every dollar of an extra payment goes straight toward principal. You could pay off your student loans faster than you would under any income-driven plan, potentially saving thousands in interest.

This pause also gives you flexibility to fund retirement accounts, save for your children’s education, or tackle high-interest credit card debt simultaneously. That’s a powerful opportunity that ends the moment you switch plans.

Understanding Your Options: PAYE vs. ICR vs. SAVE

PAYE remains the preferred choice for most borrowers who do want to switch, primarily because it caps your monthly payment at 10% of your discretionary income. ICR, by contrast, charges 20% of income and takes 25 years to reach forgiveness. However, ICR serves a specific population: borrowers with Parent PLUS loans are ineligible for every other income-driven option, making ICR their only path forward.

The core difference between these plans comes down to payment size and forgiveness timeline. PAYE’s lower payment ceiling (10% vs. 20%) and shorter forgiveness window (20 vs. 25 years) generally make it the better deal—unless you have specific circumstances like Parent PLUS loans or you were already enrolled in PAYE before switching to SAVE.

One important eligibility check: you must have had no direct loans or FFEL loans outstanding as of October 1, 2007, and taken out a direct loan after October 1, 2011, to qualify for PAYE. If you don’t meet these criteria, New IBR might be your alternative (it’s almost identical to PAYE but requires loans taken out after July 1, 2014).

How to Decide Before the July 2027 Deadline

You have until July 1, 2027, to make this choice, so you can afford to take your time and think strategically. The Education Department’s loan simulator (available through studentaid.gov) is your best friend here. It connects with your account to estimate monthly payments, total repayment costs, and forgiveness timelines under different plans.

Before switching, also consider talking to your federal loan servicer or reaching out to your college’s financial aid office directly. Many borrowers don’t realize that financial aid administrators often have deeper expertise in repayment strategy than servicer representatives—and they already have your file on hand.

The bottom line: PAYE isn’t going away in the foreseeable future, but the broader landscape of federal student loan policies remains uncertain. If you’re pursuing forgiveness, act sooner rather than later. If you’re content using the payment pause strategically, stay put. Either way, use the time you have to make an informed decision that aligns with your specific circumstances.