The Saving on a Valuable Education (SAVE) Plan replaces the existing Revised Pay As You Earn (REPAYE) Plan. The SAVE plan is an income-driven repayment option.

Borrowers earning less than $15 an hour may have loan payments as low as $0 per month. Borrowers earning more would still benefit from SAVE more than previous IDR plans, and those borrowers won’t see their balance grow as long as they keep up with payments.

When does the SAVE plan go live?

The SAVE plan won’t be fully implemented until July 1, 2024. However, the SAVE plan will go live this summer with limited benefits.

How do borrowers apply for the SAVE plan?

Until the application for the SAVE plan goes live, borrowers can enroll in the REPAYE option. All borrowers enrolled in REPAYE will automatically be moved to the SAVE plan when it goes live this summer.

What’s different about the SAVE plan?

These three benefits will be available to borrowers this summer before repayment resumes in October:

1. Expanded Eligibility and Lower Payments

The student loan payments under the SAVE plan are based on discretionary income, which is the difference between income and 225% of the poverty guidelines instead of 150% of the poverty guidelines. This will expand eligibility for more borrowers and lower monthly payments.

2. Accrued Interest Won’t Apply

Under the SAVE plan, borrowers won’t see accumulated interest applied over their payment amount. For example, if a borrower has a $30 monthly payment, but $50 in interest accumulates each month, the remaining $20 won’t be charged.

3. Spousal Income Excluded

The SAVE plan removes the need for spouses to cosign on the IDR application. 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.

What happens when the SAVE plan is fully implemented next year?

Borrowers with undergraduate loans should see their payments cut in half. Borrowers with undergraduate and graduate loans will pay a weighted average.

Borrowers could receive forgiveness sooner under the SAVE plan. Borrowers with balances less than $12,000 would receive forgiveness after 10 years, with another year for each additional $1,000, up to 20 or 25 years.

Additional support tied to the SAVE plan

Automatic Enrollment

Borrowers who go 75 days without making a payment may be automatically enrolled in the SAVE plan if they agreed to disclose their income to the Department of Education.

If borrowers in default could have received a $0 payment under the SAVE plan, they will be automatically moved to good standing and allowed to enroll in the SAVE plan.

Credit on Deferments

Borrowers can receive credit toward forgiveness while on deferment for unemployment, cancer treatment, military service, natural disasters, and similar situations.

The SAVE Plan is intended to help low- and middle-income borrowers, community college students, and public servants.
  • Borrowers with the lowest projected lifetime earnings could see payments per dollar borrowed fall by 83%, while those at the top would only see a 5% reduction.
  • Most four-year university graduates are expected to save nearly $2,000 a year.
  • Graduates seeking Public Service Loan Forgiveness such as teachers could see payments reduced by two-thirds.
  • 85% of community college borrowers are expected to be debt-free within 10 years

We help borrowers navigate repayment

IonTuiton is available to help borrowers navigate their repayment and take advantage of programs like the SAVE plan. We’re currently launching return-to-repayment support programs for colleges and universities.

Contact to receive more information.