Student Loan Pay As You Earn (PAYE) Calculator

Are you wondering how enrolling in the Pay As You Earn (PAYE) federal student loan repayment plan could impact your student loan payments? Use our PAYE Calculator to see how PAYE may be able to lower your monthly payments as well as result in forgiveness of your student loans.

PAYE limits your monthly student loans to 10% of your discretionary income. After 20 years of repayment (240 total payments), borrowers are eligible to have their remaining student loan balance forgiven on qualifying loans.

First month's payment
Last month's payment
Total balance paid
Total forgiveness
Repayment term
Your monthly payment on PAYE would be , a difference of from what you are currently paying. If your income increases over time, your payments may increase. Assuming annual income growth of 3.5%, your final monthly payment would be . After making payments for — years, you will have paid a total of and would receive in forgiveness, compared to your current plan where you will pay over the next — years.

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Total balance paid

Total forgiveness






Pay As You Earn Calculator FAQs

1. What assumptions does the PAYE Calculator make?

In order for the PAYE Calculator to provide a forgiveness estimate, we have to make some assumptions which may or may not hold true in everyone’s situation. The calculator assumes the following:

  • Your family size will remain the same during the life of the loan and poverty guidelines will increase based on the Congressional Budget Office’s estimate of inflation.
  • The current interest rate won’t change during the life of the loan (even for loans with variable interest rates).
  • All loans are unsubsidized loans for the purposes of interest accumulation.
  • You meet all eligibility requirements to enroll in PAYE (see below).

2. Am I eligible for PAYE?

Income-driven repayment plans are complicated, so we can’t guarantee that receiving a result from this calculator guarantees you’re eligible for PAYE.

In any case, the general eligibility is as follows:

  1. Must be a new borrower as of October 1, 2007 or after,
  2. Must have received a disbursement of a Direct Loan on or after Oct. 1, 2011, and
  3. Your payment on PAYE would be less than your payment on the 10-year Standard Repayment plan.

Loan types that are eligible for PAYE include:

  • Direct Loans (both Subsidized and Unsubsidized)
  • Direct PLUS Loans (made to graduate or professional students only)
  • Direct Consolidation Loans
  • Federal Stafford Loans (both Subsidized and Unsubsidized, eligible if consolidated)
  • FFEL PLUS Loans (made to graduate or professional students only, eligible if consolidated)
  • FFEL Consolidation Loans (eligible if consolidated and only if does not contain parent loans)
  • Federal Perkins Loans (eligible if consolidated)

Loan types that are generally ineligible for pay are:

  1. Parent PLUS Loans
  2. FFEL PLUS Loans made to parents
  3. Direct Consolidation Loans that repaid a Parent PLUS Loan

3. What options do I have other than PAYE?

The closest alternative to PAYE is likely the Revised Pay As You Earn Program (REPAYE). Whereas PAYE is limited only to new borrowers as of October 1, 2007 or later, REPAYE is available to any borrower who has qualifying loans.  Like PAYE, REPAYE limits monthly student loans payments to 10% of discretionary income.

However, it’s worth noting that PAYE and REPAYE have some key differences. You can read more about them in the REPAYE article above.

4. Is student loan forgiveness through PAYE taxable?

Yes. According to the IRS, student loan forgiveness received through PAYE is generally considered taxable income.

5. How do I know if PAYE is the right option for me?

Choosing a repayment option can be difficult, especially when your financial situation may change over the course of 20 to 25 years. To decide which income-driven repayment plan is best for you, we generally recommending testing out each program and finding the one that estimates the lowest total amount paid over the entire repayment period.

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