Keep college loans away from collections with the new student loan repayment plan called the Saving on a Valuable Education (SAVE) plan. The SAVE plan is designed to be the most affordable repayment plan ever created, saving real money on monthly payments.
How the SAVE plan works
The SAVE plan is an income-driven repayment (IDR) plan. IDR plans calculate monthly payments based on a borrower’s income and family size, not the size of their student loan balance. This means that borrowers with lower incomes can make smaller payments, and borrowers with higher incomes can make larger payments.
The SAVE plan has several features that make it more affordable than other IDR plans:
- Monthly payments capped at 10% of discretionary income.
- Never make payments that are more than the interest that is accruing on their loans. Loan balances will never grow while enrolled in the SAVE plan.
- Borrowers can get their loans forgiven after 20 years of repayment. This is the same forgiveness period as other IDR plans.
Who is eligible for the SAVE plan?
The SAVE plan is available to all borrowers who have federal student loans with some income and family size restrictions. Borrowers must have a total annual income that is less than or equal to 150% of the federal poverty guidelines for their family size.
How to enroll in the SAVE plan
Borrowers can enroll in the SAVE plan by visiting the Federal Student Aid website. They will need to provide their income and family size information, and they will need to choose a repayment term.
The SAVE plan is a new and affordable student loan repayment plan that could save millions of borrowers money. If you are struggling to make your student loan payments, the SAVE plan may be a good option for you.
External links
- Fact Sheet: The Biden-Harris Administration Launches the SAVE Plan: https://www.whitehouse.gov/briefing-room/statements-releases/2023/08/22/fact-sheet-the-biden-harris-administration-launches-the-save-plan-the-most-affordable-student-loan-repayment-plan-ever-to-lower-monthly-payments-for-millions-of-borrowers/
- StudentAid.gov/SAVE: https://studentaid.gov/save
