There is going to be another change in how federal student loans are paid back. PAYE and ICR Are Ending: What Borrowers Should Do. The Department of Education will stop ICR and PAYE on June 30, 2028. Enrolment is projected to close earlier (probably in late 2027 or early 2028, according to sources), so borrowers can’t wait until the last minute to apply. PAYE and ICR Are Ending: What Borrowers Should Do
It’s crucial for the 2.5 million borrowers who are in these plans to know that the plans don’t go away overnight. You can continue making payments until the deadline. But the greatest risk is not knowing what will happen next for too long.
What The ICR and PAYE Phase-Out Mean
ICR and PAYE are being phased out due to the One Big Beautiful Bill Act, which was attempting to simplify student loan repayment.
The 2028 end date means two things at once:
- No new borrowers will be able to enter ICR or PAYE once enrolment closes.
- Borrowers currently using those plans will need to migrate to IBR or RAP.
Although the statutory end date is June 30, 2028, the Department of Education is widely expected to stop accepting new ICR and PAYE applications months earlier than that date. The reason is operational: loan servicers need time to process applications, update systems, and guide borrowers into other repayment plans. PAYE and ICR Are Ending: What Borrowers Should Do
From a borrower’s perspective, this means June 2028 is not the exact deadline to rely on. And anyone hoping to enter PAYE or ICR should do so now; otherwise, it becomes moot. PAYE and ICR Are Ending: What Borrowers Should Do
Options If You’re Currently Enrolled In ICR or PAYE
Borrowers already enrolled in PAYE or ICR can continue making payments under those plans for now. Monthly payments, interest accrual, and progress toward loan forgiveness do not suddenly stop. PAYE and ICR Are Ending: What Borrowers Should Do
The safest approach is to treat the remaining years as a planning window. Now’s the time to plan.
Key variables to compare moving forward include:
- Monthly payment size at current and future income levels
- Total amount paid before any potential forgiveness
- Forgiveness timeline and any remaining taxable balance PAYE and ICR Are Ending: What Borrowers Should Do
The point is not to switch immediately but to understand the trade-offs.
Special Rules For Parent PLUS Loan Borrowers
Parent PLUS borrowers face a more limited set of choices. Even borrowers who used a double consolidation to gain access to income-driven repayment will not be eligible for RAP. PAYE and ICR Are Ending: What Borrowers Should Do
For this group, IBR is the only remaining income-driven option once ICR sunsets. And this is only for existing Parent PLUS borrowers, not future borrowers. PAYE and ICR Are Ending: What Borrowers Should Do
That reality makes early planning even more important. Parent borrowers should:
- Confirm eligibility for IBR based on loan type and consolidation history
- Estimate payments at current income and near retirement
- Understand forgiveness timelines and how they interact with family finance PAYE and ICR Are Ending: What Borrowers Should Do
Changes in Parent PLUS balances, often larger and associated with later-career borrowers, can significantly impact household budgets.
The Bottom Line
The end of ICR and PAYE is coming. Borrowers who use these plans have time to prepare, but that time is finite. PAYE and ICR Are Ending: What Borrowers Should Do
Understanding how IBR and RAP compare can turn a policy change into a manageable transition rather than a financial surprise. PAYE and ICR Are Ending: What Borrowers Should Do