SAVE Program Student Loans

If you’re navigating the world of student loans, the Saving on a Valuable Education (SAVE) Plan could be your saving grace. This blog post is here to break down everything you need to know about this new income-driven repayment (IDR) plan, from how it works to the benefits it offers. Let’s get started with SAVE Program Student Loans.

What is SAVE Program Student Loans

The SAVE Program Student Loans is an income-driven repayment plan for student loans. Just like other IDR plans, it calculates your monthly payment based on your income and family size. The big advantage? It often results in the lowest monthly payments for most student borrowers.

Replacing the REPAYE Plan – Out with the Old, In with the New

The SAVE Plan has replaced the Revised Pay As You Earn (REPAYE) Plan. If you were on the REPAYE Plan, you automatically get the benefits of the new SAVE Plan.

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What Are the New Benefits? – What’s in it for You

The SAVE Plan comes with several benefits:

  • Significantly Lower Monthly Payments: The plan increases the income exemption, meaning you pay less each month compared to other income-driven plans.
  • Interest Elimination: After making a scheduled payment, 100% of the remaining interest is wiped out for both subsidized and unsubsidized loans.
  • Excludes Spousal Income: If you’re married and file separately, your spouse’s income won’t be considered when determining your payment.

How to Apply for the SAVE Plan – Getting Started

Applying is simple. Use the IDR application, select the lowest monthly payment plan (usually SAVE), and you’re on your way.

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Already on an IDR Plan? — Check Your Status

If you’re already on an IDR plan, especially REPAYE, you’ll be moved to the SAVE Plan automatically. If not, you can enrol in the SAVE Plan through StudentAid.gov.

Loan Eligibility – What Loans Qualify

Eligible loans for the SAVE Plan include Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans for graduate students, and certain Direct Consolidation Loans. Some loans may need consolidation to qualify.

Ineligible Loans – What Doesn’t Qualify

Certain loans, like Direct PLUS Loans for parents and loans in default, are not eligible for the SAVE Plan.

Monthly Payments – What You’ll Pay

Your monthly payment depends on your income and family size. If you earn $32,800 or less per year, your payment could be as low as $0. For those making more, expect savings compared to other plans.

Income / Family Size12345
$60k$227$130$34$0$0
$50k$143$47$0$0$0
$40k$60$0$0$0$0
$30k$0$0$0$0$0
$20k$0$0$0$0$0
SAVE Program Student Loans Chart

Meet Emily,

Annual Income: $38,000
Loan Balance: $25,000
Interest Rate: 5% on a Direct Subsidized Loan

Emily is a borrower with no dependents who earns $38,000 a year. With the SAVE Plan, she can save $91 each month.

Previous Monthly Payment Under REPAYE: $134
New Monthly Payment Under SAVE: $43

Please note that these estimates are for illustration purposes only and may vary based on your specific circumstances. Your loan servicer will calculate your actual monthly payment under the SAVE Plan.

Future Changes – What’s Ahead

Starting next summer, payments for undergraduate loans will be reduced to 5% of income above 225% of the poverty line. Borrowers with a mix of undergraduate and graduate loans will have a weighted average payment.

Conclusion

The SAVE Program is a game-changer for student loan borrowers, offering lower payments, interest elimination, and more. Whether you’re just starting or already on an IDR plan, this program can make managing your student loans more manageable. Stay informed and take advantage of this valuable opportunity.

FAQ

What is the SAVE Program for student loans?

The SAVE Program is an income-driven repayment (IDR) plan that calculates your monthly student loan payments based on your income and family size, often resulting in lower payments.

What happened to the REPAYE Plan, and how does it relate to the SAVE Program?

The SAVE Program has replaced the REPAYE Plan. Borrowers who were on the REPAYE Plan are automatically enrolled in the SAVE Program.

What are the benefits of the SAVE Program?

The SAVE Program offers significant benefits, including lower monthly payments based on income, the elimination of all remaining interest after a scheduled payment, and the exclusion of spousal income for married borrowers.

How do I apply for the SAVE Program?

You can apply for the SAVE Program by using the income-driven repayment (IDR) application. Choose the lowest monthly payment plan, which is usually the SAVE Program.

Are all student loans eligible for the SAVE Program?

Eligible loans include Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans for graduate students, and specific Direct Consolidation Loans. Some loans may need consolidation to qualify. Loans not eligible for the SAVE Program include Direct PLUS Loans for parents, loans that repaid PLUS loans for parents, and loans in default.