What is the SAVE Repayment Plan and what to know if I am eligible for student loans?

The new SAVE repayment plan offers lower monthly payments, forgiveness options, and government interest subsidies to make student loans more manageable for eligible borrowers.


The Biden-Harris Administration recently launched the Saving on a Valuable Education (SAVE) Plan, an income-driven repayment (IDR) plan designed to make student loan payments more manageable and affordable.

The SAVE Plan replaces the Revised Pay-As-You-Earn (REPAYE) plan and offers borrowers lower monthly payments, forgiveness options, and a government interest subsidy. In this article, we will explore the SAVE repayment plan, its benefits, and what you need to know about which student loans are eligible.

How the SAVE Plan works

The SAVE plan calculates payments based on a borrower’s income and family size, not their loan balance. Borrowers with undergraduate loans will have their payments reduced from 10% to 5% of their discretionary income.

Those with undergraduate and graduate loans will pay a weighted average between 5% and 10% of their income. The plan also offers forgiveness options, with borrowers whose original principal balances were $12,000 or less eligible for forgiveness after 120 payments (equivalent to 10 years in repayment).

Benefits of the SAVE Plan

The SAVE plan offers several benefits to borrowers, including:

  • Lower Monthly Payments: Borrowers with undergraduate loans will see their payments cut in half, from 10% to 5% of their discretionary income.
  • Forgiveness Options: Borrowers with low-balance loans (less than $12,000) are eligible for forgiveness after 10 years of payments.
  • Government Interest Subsidy: The government will cover any unpaid interest, preventing borrowers’ balances from growing.
  • $0 Monthly Payments: Borrowers earning less than $30,000 per year will have their monthly payments reduced to $0.

Eligibility and enrollment

To be eligible for the SAVE plan, borrowers must have federal student loans and be enrolled in an income-driven repayment plan. Borrowers can sign up for the SAVE plan by visiting (link unavailable). The application process takes less than 10 minutes to complete. Borrowers who are already enrolled in the REPAYE plan will be automatically enrolled in the SAVE plan, with their payments adjusting accordingly.

Things to consider

While the SAVE plan offers several benefits, there are some things to consider:

  • Consolidation: If you consolidate parent PLUS loans into a Direct Consolidation Loan, that new loan will not be eligible for the SAVE plan.
  • Loan Forgiveness: Forgiveness options may not apply to all borrowers, and the amount forgiven may be taxable.
  • Interest Accrual: While the government will cover unpaid interest, borrowers should still make timely payments to avoid accrual.

How to apply for the SAVE Plan

Applying for the SAVE plan is a straightforward process that can be completed online or by mail. Here are the steps to follow:

  • Visit the Federal Student Aid website: Go to Federal Student Aid website and log in to your account.
  • Click on “Apply for Income-Driven Repayment”: Select the “SAVE Repayment Plan” option.
  • Fill out the application: Provide your personal and income information.
  • Submit the application: Review and submit the application.
  • Wait for approval: Your loan servicer will review and approve your application.

Tips and reminders

  • Reapply annually: Your income and family size may change, so reapply every year to ensure you remain eligible.
  • Keep records: Keep records of your income and loan payments, as you may need them for future applications.
  • Contact your loan servicer: If you have questions or issues, contact your loan servicer for assistance.

What the SAVE Repayment Plan offers

The SAVE repayment plan offers borrowers a more affordable and manageable way to repay their student loans. With lower monthly payments, forgiveness options, and a government interest subsidy, the SAVE plan is an attractive option for those struggling with student loan debt.

If you’re eligible for student loans, it’s important to understand the SAVE plan and how it can benefit you. By taking advantage of this plan, you can take control of your student loan debt and achieve financial stability.

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