RAP, IBR, PAYE, or Tiered Standard? Compare the structure first.

PAYE is a conditional, transitional option

PAYE requires eligible Direct Loans, the October 1, 2007 new-borrower test and a qualifying disbursement from October 1, 2011. New enrollment also requires partial financial hardship. FFEL and Parent PLUS loans are not directly eligible, and new Direct borrowing from July 1, 2026 changes the available plans.

PAYE generally uses 10% of income above 150% of the poverty guideline, subject to its Standard payment cap. At $55,000 AGI and family size three in the contiguous states, the 2026 estimate is $116.83 per month before cap or spouse-loan adjustments. PAYE ends by July 1, 2028; do not promise a new 20-year PAYE term.

Tiered Standard depends on borrowing dates and balance

At least one Direct Loan must be first disbursed on or after July 1, 2026. Starting repayment on an older loan is not the same as receiving a new loan. New Direct Parent PLUS borrowers use Tiered Standard; FFEL loans are not directly eligible.

The principal balance at plan entry sets a fixed term: under $25,000 is 10 years; $25,000 to under $50,000 is 15; $50,000 to under $100,000 is 20; and $100,000 or more is 25. Income and dependents do not change the payment. Longer terms increase interest and do not provide IDR forgiveness.

Compare the same questions across every plan

• Is the borrower and every included loan eligible?
• How is the required payment calculated now?
• Can the payment change, and how often?
• How long is the repayment period?
• What happens to unpaid interest?
• Does the route support the borrower’s forgiveness strategy?

Do not mix an estimate with an approval

Federal calculators and private estimators can help compare scenarios, but the actual required payment comes from the approved plan and servicer processing.

A low first payment does not automatically mean the lowest total cost or the best long-term route.

Use the current federal tools

Repayment rules changed in July 2026. Use the current StudentAid.gov repayment calculator and current servicer notices rather than an old screenshot, article, or remembered formula.