March 25, 2022

How to Qualify for Pay As You Earn (PAYE)


The PAYE program is one of the repayment plans offered by the federal government that aims to reduce your monthly payments. It’s income-driven, meaning that you’ll only pay a portion of your discretionary income while under it. For PAYE, you only need to contribute 10%, which is the lowest rate of any income-driven repayment plan offered for federal student loans.

The Qualifications

PAYE is only available to those under federal loans (Direct or Direct consolidation). These loans must originate after October 1, 2011, or October 1, 2007, if it’s your first federal loan. To qualify, you must show that you are in financial hardship. You can prove this through documentation.

What If I Don’t Fulfill the PAYE Requirements?

If you don’t fulfill any of the requirements listed above, you cannot enroll in PAYE. However, there may be other plans that could work for you. Income-Based Repayment (IBR) is available for all borrowers, but you’ll pay 15% of discretionary income to PAYE’s 10%.

There is also an option for the Revised Pay As You Earn plan or REPAYE. It has similar terms as PAYE, but PSLF after 20 years is only available for those who took undergraduate studies. If you took a graduate course, loan forgiveness is only available after 25 years of payment.

The Benefits of PAYE

One of the benefits of PAYE is that you’ll significantly reduce your payments to 10% of your discretionary income. That means that the plan will always accommodate what you have in that month. As long as you’re providing the payments, you’ll continue to fulfill the loan without any issue. You can qualify for Public Service Loan Forgiveness (PSLF) after 20 years of continuous payments.

Applying for PAYE

You can apply for PAYE at the Federal Student Aid website, where you’ll see a button for income-driven repayment plan applications. Your login to the portal will be your FSA ID, the same login used during your first application for the student loan. You’ll then fulfill the following details:

  • Employment
  • Family
  • Most recent federal tax return

After completing the details, you enter the income into a loan payment calculator and choose a plan available. You’ll then add your personal information, confirm, and sign the application. You’ll only have to wait for PAYE’s approval, which will only take up to five working days. There’s also an option to apply for PAYE through a paper application, but doing it online is the more convenient option.

Is PAYE Right for Me?

PAYE is the best option to take if you don’t expect your income will increase any time soon. While many borrowers complete their loans within 20 years, it’s the better option if you cannot do the same. Once you’ve paid your loans for 20 years, the government will repay your loans.

It may also be the ideal option if you’ve completed graduate studies and have more debt to complete. Under PAYE, you can complete the loan within 20 years compared to REPAYE’s 25.

Use Chipper for Lower Payments

Chipper can help you find a student loan repayment plan that actually fits into your budget. You simply fill out your information and link your student loan account for us to generate your options in seconds. We help the average student loan borrower save over $300 a month off their student loan monthly payment. Lowering your monthly payment plan can game changing for your personal finance and can be done in minutes! Sign up for Chipper today to get on track with your student loans.

Use Chipper for The Best Path to Forgiveness

Finding your path to student loan forgiveness is easier than ever before. Chipper helps members find better Income-Driven Repayment (IDR) plans every day. Once enrolled in an eligible repayment plan, we can help you explore your forgiveness options and understand your path towards forgiveness. Sign up with Chipper today and get on track with your student loans.

Use Chipper for Round-Ups

Paying off your student loans doesn’t have to be a long and painful journey. Round-Ups are a way to directly pay off your loans with your everyday spending! By tracking your linked spending account(s), we will calculate the rounded up amount from each transaction in a week (IE spending $4.28 would add $0.72 to the weekly amount). We then initiate a payment towards your student loan for the weekly amount. Get chipping away on your student loans with Chipper today.

Use Chipper for Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness (PSLF) program was created to provide relief to borrowers aiding the public sector. Unfortunately, 30% of applicants are denied due to incorrect paperwork. We can help! Chipper was created to solve this issue by assisting borrowers in understanding their options as well as allowing forgiveness eligible users enroll into the best forgiveness program available. Sign up for Chipper today to see your student loan forgiveness options and get the forgiveness you deserve.

Use Chipper for Teacher Loan Forgiveness (TLF)

The Teacher Loan Forgiveness (TLF) program was created to enable teachers working in Title 1 schools to receive student loan forgiveness of up to $17,500 (depending on their teaching subject). Chipper has helped teachers from all over the country qualify for TLF program and can help you get the forgiveness you deserve today. Find out if you qualify for forgiveness in minutes with our employer search tool.

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