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.
By law, the regulations will go fully into effect on July 1, 2024. But the Department will implement three critical benefits this summer before the student loan payment pause ends:
• The amount of income protected from payments on the SAVE plan will rise from 150 percent to 225 percent of the Federal poverty guidelines (FPL). This change means a single borrower who earns less than $32,805 a year ($67,500 for a family of four) will not have to make payments. As a result, we estimate that more than 1 million additional low-income borrowers will qualify for a $0 payment, including 400,000 who are already enrolled on the REPAYE plan and will see this benefit applied automatically. This will allow them to focus on food, rent, and other basic needs instead of loan payments. Borrowers not eligible for a $0 payment will save at least $1,000 a year compared to the current REPAYE plan. A single borrower would save $91 a month on payments ($1,080 a year), while a family of four would save $187 ($2,244 a year).
• The Department will stop charging any monthly interest not covered by the borrower’s payment on the SAVE plan. As a result, borrowers who pay what they owe on this plan will no longer see their loans grow due to unpaid interest. We estimate that 70 percent of borrowers who were on an IDR plan before the payment pause would stand to benefit from this change.
• Married borrowers who file their taxes separately will no longer be required to include their spouse’s income in their payment calculation for SAVE. These borrowers will also have their spouse excluded from their family size when calculating IDR payments, simplifying the choice of repayment plan for borrowers