Federal student loan repayment is entering another period of change. The Ministry of Education ends ICR and PAYE by June 30, 2028. To make this possible, enrollment is expected to close early (most likely in late 2027 or early 2028 according to sources) so borrowers cannot wait until the last minute to apply.
For the approximately 2.5 million borrowers enrolled in these plans, it’s important to know that plans don’t disappear overnight. Payments can continue until the deadline. But the biggest risk is waiting too long to understand what comes next.
What does the phase-out of ICR and PAYE mean?
ICR and PAYE are being phased out due to the One Big Beautiful Bill Act, which was trying to simplify student loan repayment.
The 2028 completion date means two things at once:
- No new borrowers will be able to enter ICR or PAYE once registration closes.
- Borrowers currently using these plans will need to move to IBR or RAP.
Although the statutory end date is June 30, 2028, it is widely expected that the Department for Education will stop accepting new ICR and PAYE applications months in advance. The reason is practical: Loan servicers need time to process applications, update systems, and route borrowers to other repayment plans.
From the borrower’s perspective, this means that June 2028 is not an exact deadline that can be relied upon. Anyone hoping to get into PAYE or ICR needs to do so now, otherwise it becomes moot.
Options if you are currently enrolled in ICR or PAYE
Borrowers already enrolled in PAYE or ICR can continue to make payments under these plans for the time being. Monthly payments, interest accrual, and progress toward loan forgiveness don’t suddenly stop.
The safest approach is to treat the remaining years as a planning window. It’s time to plan.
Key variables to compare going forward include:
- The size of the monthly payment at current and future income levels
- The total amount paid before any possible pardon
- Exemption schedule and any remaining balance is taxable
The key is to look at the difference between IBR and RAP for your situation.
The goal is not to switch right away, but to understand the trade-offs.
Special rules for parent loan borrowers in addition
Parent PLUS borrowers face a limited set of options. Even borrowers who used a Double unification To access income-based repayment no Be eligible for the RAP program.
For this group, IBR is the only remaining income-based option Once the sun sets ICR. This is only for current Parent PLUS borrowers, not future borrowers.
This reality makes early planning even more important. Parent borrowers must:
- Confirm IBR eligibility based on loan type and consolidation date
- Estimate payments in current income and near retirement
- Understand forgiveness schedules and how they interact with family finances
Because Parent PLUS balances are often larger and associated with borrowers later in their careers, these changes can have real consequences for family budgets.
Bottom line
The end of ICR and PAYE is coming. Borrowers using these plans have time to prepare, but that time is limited.
Understanding how IBR and RAP compare can turn a policy change into a manageable shift rather than a financial surprise.
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