President Obama announces Pay As You Earn (PAYE) executive action, capping payments at 10 percent of income

President Barack Obama announces the Pay As You Earn (PAYE) repayment plan via executive action, available to federal student loan borrowers who took out loans after October 1, 2007. PAYE caps monthly payments at 10 percent of discretionary income (lower than IBR's 15 percent) with forgiveness after 20 years. The program immediately benefits approximately 1.6 million borrowers. PAYE represents the most affordable income-driven repayment option to date and reflects administration's prioritization of borrower relief. Executive action allows implementation without Congressional approval, demonstrating presidential power in student loan policy.