Graduate borrowers, consider this student loan plan before July 1

Starting July 1, the Education Department will limit enrollment in three income-driven repayment plans, which cap monthly student loan payments at a certain portion of income and can eventually forgive remaining debt.plan will close all new enrollment starting July 1. If you’re already on PAYE, you’ll remain on the plan.

Here’s who should act before the deadline, what these July 1 changes could mean for you and how to prepare.PAYE is a good fit for certain borrowers.

If you determine PAYE is your best option, start your application ASAP and submit it by June 30 at the latest. Sign up for the plan online by filling out the application on Starting July 1, the ICR plan will only be available to borrowers who have a direct consolidation loan containing a parent PLUS loan. The plan has a 25-year repayment term and caps payments at 20% of discretionary income, rather than 5% to 15% with other plans. As a result, ICR is not the best fit for the majority of borrowers, so this change won’t have a wide impact, Hoffman says.

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