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Graduate Borrowers, Consider This Student Loan Plan Before July 1

Starting July 1, the Education Department will limit enrollment in three income-driven repayment (IDR) plans, which cap monthly student loan payments at a certain portion of income and can eventually forgive remaining debt.

The most significant change: The Pay as You Earn (PAYE) plan will close all new enrollment starting July 1. If you’re already on PAYE, you’ll remain on the plan.

“Any borrower who has significant debt and thinks they’re going to get forgiveness under an income-driven plan should look into whether Pay as You Earn is able to save them more money over time,” says Betsy Mayotte, president and founder of The Institute of Student Loan Advisors.

If PAYE is your route to paying the least over time, apply ASAP. As long as you submit a PAYE application before July 1, you’ll get onto the plan if your application is approved, even if that approval comes after July 1, an Education Department spokesperson told NerdWallet on June 6.