- The SAVE program is a new income-driven repayment program for federal student loans, replacing the REPAYE plan.
- Some elements of the program are going into effect later this summer. The rest, including halved monthly payments, will be implemented in July 2024.
- Whether SAVE will save you money depends on your income and family size.
President Biden's broad student loan forgiveness plan didn't make it past the Supreme Court. But so far, the new Saving on a Valuable Education program (SAVE), a new income-driven repayment plan, is moving ahead to help some borrowers , pending legal action.
Here's what the SAVE program for repaying student loans is—and what it isn't.
What is the SAVE plan?
The SAVE plan is an income-driven repayment plan for borrowers with federal student loans. Just like the other 3 federal income-driven repayment plansOpens in a new window
, the monthly payments are determined by the borrower's income and family size.
Generally, the lower someone's income and higher their family size, the less they would have to pay on this plan. In fact, some borrowers are entitled to $0 monthly payments if they meet certain income and family size thresholds. The higher someone's income and lower their family size, though, the more they would have to pay on this plan. That means it might not be the best plan for every borrower.
The SAVE student loan program is taking the place of the Revised Pay as You Earn (REPAYE) plan. Neither plan is the same as the one-time broad student loan forgiveness plan that would have forgiven up to $20,000 in federal student loans for qualified borrowers because the Supreme Court struck that down. Still, some borrowers on the SAVE plan will have a chance at reaching forgiveness.