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- There are several reduced-payment options for student loan holders who meet income and family size requirements.
- An income-driven repayment plan may be a good choice if you can't handle your monthly payments.
- Your federal student loans are no longer in forbearance.
What changed with the SAVE plan?
Student loan payments have started up again, and you might not be ready to keep paying the amount you've previously been able to going forward.
The good news is that there are ways to reduce your monthly payment if you have federal loans. If your current monthly payments eat up a lot of your income, or you have dependents, you may qualify for an income-driven repayment plan.
The SAVE Plan is a simplified income-driven repayment (IDR) plan, which aims to provide more affordable student loan payments for borrowers with low to middle incomes. The SAVE Plan replaces the previous variations of IDR plans (Income-Contingent, Income-Based, Revised Pay As You Earn). Borrowers are expected to have substantially lower monthly payments compared to other IDR options.
How does the SAVE plan work?
The SAVE plan offers four key components to those working to pay off their student loan balance:
- Income-based payments: Your monthly payment is tied to your discretionary income (income above a certain threshold).
- Lower payment percentage: The SAVE Plan calculates your payment based on a smaller percentage of your discretionary income compared to older IDR plans.
- Loan forgiveness: If you make payments for the required time (typically 20-25 years), your remaining student loan balance is forgiven.
- Subsidized interest coverage: The government may cover some or all of your unpaid subsidized loan interest under the SAVE Plan.
Do I qualify for the SAVE plan?
To know if you qualify for the SAVE plan, you need to know your loan type, as well as a few key details. The loans eligible for the SAVE plan are:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct PLUS Loans made to graduate or professional students
- Direct Consolidation Loans that didn't repay any PLUS loans made to parents
Those with Subsidized Federal Stafford Loans (from the FFEL Program), Unsubsidized Federal Stafford Loans (from the FFEL Program), graduate students with FFEL PLUS Loans, FFEL Consolidation Loans, or Federal Perkins Loans, are only eligible for the SAVE plan if consolidating these loans into a direct consolidation loan
As for income requirements, there is no income limit to qualify for the SAVE plan.
Compare Student Loan Rates
Today's student loan rates will vary by loan issuer, and even small differences in interest rates will add up over time. Compare rates from the best student loan refinance companies and best private student loans using a student loan marketplace before you apply.
FAQs
How do I apply for the SAVE Plan? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.To apply for the SAVE Plan, the process will likely be through the Student Aid website. Details on the new IDR changes and how to apply are being revised.
How does the SAVE Plan affect Public Service Loan Forgiveness (PSLF)? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.The SAVE Plan can work in conjunction with PSLF, potentially lowering your payments and making forgiveness more accessible.
Are there drawbacks to the SAVE Plan? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.Drawbacks to the SAVE Plan include the fact that interest that can still accrue on unsubsidized loans, and the length of the forgiveness timeline (20-25 years).
Alexis Rhiannon Alexis Rhiannon is a Los Angeles-based freelance writer and comedian. Her work has appeared in outlets like Allure, Salon, Good Housekeeping, Bustle, and Grow, and she performs improv weekly at the Upright Citizens Brigade Theater. Read more Read less 
Ryan Wangman, CEPF Loans Reporter Ryan Wangman was a reporter at Personal Finance Insider reporting on personal loans, student loans, student loan refinancing, debt consolidation, auto loans, RV loans, and boat loans. He is also a Certified Educator in Personal Finance (CEPF).In his past experience writing about personal finance, he has written about credit scores, financial literacy, and homeownership. He graduated from Northwestern University and has previously written for The Boston Globe. Read more Read less Top Offers From Our Partners 
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