In August 2013, President Obama announced a major drive to increase enrollment in “Pay As You Earn” (PAYE), a federal student loan repayment option based on income and family size. PAYE was introduced by the administration in 2011 as a temporary relief for struggling borrowers.
With the planned expansion, however, the program is fast turning into a permanent part of higher education funding. PAYE is particularly being targeted to young college graduates, who have been among the worst affected by the Great Recession and slow recovery.
Given PAYE’s increasing role as a policy tool, it’s important we get our FAQs straight on what PAYE is and the potential implications for borrowers, colleges and universities, and taxpayers.
This factsheet addresses some common questions about PAYE, to help inform the discussion surrounding the future of higher education funding.
Read the entire Factsheet on PAYE here.
