University of Virginia Library

'Hybrid' Plans Differ

The modified or "hybrid"
PAYE plan recommended by
the task force differs from the
conventional PAYE concept.
The modified plan does not
distribute payments precisely
in accord with incomes but
distributes according to a fixed
graduated schedule rising with
the expected growth in future
earnings of the average
borrower.

Graduates whose incomes
do not increase in accord with
the plan would be able to defer
the unpaid portion annually,
arriving at the end of the
repayment period with an
outstanding debt which would
be forgiven and absorbed by
the college.