August 24, 2023 – The Saving on a Valuable Education (SAVE) Plan, like other income-driven repayment (IDR) plans, calculates your monthly payment amount based on your income and family size. The SAVE Plan provides the lowest monthly payments of any IDR plan available to nearly all student borrowers.
The new plan can significantly decrease your monthly payment amount compared to all other income-driven repayment plans.
Your monthly payment amount is based on your discretionary income—the difference between your adjusted gross income (AGI) and 225% of the U.S. Department of Health and Human Services Poverty Guideline amount for your family size. That means you will not owe loan payments if you are a single borrower earning $32,800 or less or a family of four earning $67,500 or less (amounts are higher in Alaska and Hawaii). Borrowers earning more than these amounts will save at least $1,000 per year compared to the current income-driven repayment plans.
The plan eliminates 100% of remaining interest for both subsidized and unsubsidized loans after a scheduled payment is made. If you make your monthly payment, your loan balance won’t grow due to unpaid interest. For example: If $50 in interest accumulates each month and you have a $30 payment, the remaining $20 would not be charged.
When can I apply for the SAVE Plan?
The updated IDR application is now available and includes the option to enroll in the new SAVE Plan. If you are enrolled in the REPAYE Plan or recently applied, you will be automatically enrolled in the SAVE Plan. There is no need to reapply or request to change your plan. Learn how to check which plan you’re on.
How do I apply for the SAVE Plan?
Use the IDR application to apply for the SAVE Plan now. You can select the option for your loan servicer to place you on the lowest monthly payment plan (this will usually be SAVE).
What if I’m already on an IDR plan?
If you are already on an IDR plan, check to see if you are on the REPAYE Plan. Log in to StudentAid.gov, go to your My Aid page, scroll down, and view your loans. Each loan will list a repayment plan. If you see that you are enrolled in the REPAYE Plan, you’ll automatically be enrolled in the SAVE Plan later this summer. You can now enroll in the SAVE Plan if you’re on a different repayment plan. If you don’t have a StudentAid.gov account, create an account now.
Which loans are eligible for the SAVE Plan? Which loans are ineligible?
Eligible loans for the SAVE Plan include
- Direct Subsidized Loans,
- Direct Unsubsidized Loans,
- Direct PLUS Loans made to graduate or professional students, and
- Direct Consolidation Loans that did not repay any PLUS loans made to parents.
Loans that must first be consolidated into a Direct Consolidation Loan to be eligible for repayment under the SAVE Plan are
- Subsidized Federal Stafford Loans (from the FFEL Program),
- Unsubsidized Federal Stafford Loans (from the FFEL Program),
- FFEL PLUS Loans made to graduate or professional students,
- FFEL Consolidation Loans that did not repay any PLUS loans made to parents, and
- Federal Perkins Loans.
Loans that are ineligible for repayment under the SAVE Plan are
- Direct PLUS Loans made to parents,
- Direct Consolidation Loans that repaid PLUS loans made to parents,
- FFEL PLUS Loans made to parents,
- FFEL Consolidation Loans that repaid PLUS loans made to parents, and
- any loan that is currently in default.
If your loans are in default, you may qualify for the Fresh Start initiative to easily get your loans back in good standing. It’s free and takes 10 minutes or less to sign up and enroll in an affordable repayment plan, such as the SAVE Plan, with payments as low as $0 a month.
For more information, visit the Federal Student Aid Website.