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SAVE: The New Saving on a Valuable Education Repayment Plan

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Saving on a Valuable Education (SAVE) is a new income-driven repayment plan with several especially generous features. But while some perks of the SAVE student loan plan won’t be available until next year, you can sign up for it now.

But should you? Let’s take a look at what you need to know, from key benefits to how to apply.

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What is the Saving on a Valuable Education (SAVE) plan?

The Saving on a Valuable Education (SAVE) plan is a new income-driven repayment plan for federal student loan borrowers. It was introduced by the U.S. Department of Education in 2023 as a replacement for the Revised Pay As You Earn (REPAYE) plan.

Like other income-driven repayment plans (IDRs), the SAVE plan calculates your monthly payment based on your income and family size. With these plans, your payment amount is typically equal to a (hopefully affordable) percentage of your discretionary income.

The SAVE plan’s standout feature is that it cuts that percentage in half, drastically reducing the amount you’re required to pay each month.

If you’re currently on a REPAYE plan, you’ll automatically be enrolled in SAVE and will begin to receive its unique benefits once they go into effect. However, borrowers on other plans will need to apply for SAVE in order to become enrolled in the new plan. (More on that below.)

How does the SAVE repayment plan work?

As mentioned above, the SAVE plan has several standout features that make it more generous than other IDRs available.

Here’s an overview of what you can expect if you choose to enroll — still, keep in mind that not all of these benefits will go into effect right away. Some took place in July and August of 2023, while others won’t become effective until July 2024.

Key Features of the SAVE Plan

FeatureWhat it Means for Borrowers
Effective Date: Summer 2023
  • SAVE increases the amount of your income that won’t count when calculating payments. The exemption will be 225% of your state’s poverty line, compared to 150% for REPAYE.
  • If your household income falls below 225% of the federal poverty guidelines (roughly, $15 per hour) you may qualify for a $0 monthly payment on your student loans.
  • So long as you make your monthly payments, no unpaid interest will ever be added to your total loan amount (in other words, no capitalized interest under SAVE).
  • As long as you make your monthly payment, your loan balance won’t grow because of unpaid interest.
  • Spousal income is excluded for borrowers who are married and filing separately.
  • If you’re married and file taxes separately from your spouse, they no longer need to cosign your IDR application.
  • The SAVE plan integrates with the IRS tax filing system and can perform automatic recertification for income and family size.
  • When you enroll, you can choose to have the IRS automatically share information about your income and family size, which means you’ll no longer need to manually provide this information each year.
  • The IDR application has been redesigned.
  • It should allow you to apply in 10 minutes or less.
Effective Date: July 2024
  • Expected payment amounts will be reduced.
  • If you have undergraduate loans, you’ll pay just 5% of your discretionary income (compared to 10% on other IDR plans.) Those graduate school loans will pay 10%, while those with a mix of the two will pay a weighted average. 
  • Borrowers with principal balances of $12,000 or less on undergraduate loans will have their balance forgiven after 10 years of payments. Those with larger balances will require an extra year of payments for each additional $1,000 borrowed, up to 20 years (undergrad) or 25 years (graduate).
  • If you originally took out less than $12,000 in student loans as an undergrad, your remaining balance will be forgiven after you make 10 years of payments. Graduate student loans, however, will take 25 years for forgiveness.
  • If you choose to consolidate your loans, you’ll receive credit for a weighted average of the payments you’ve made that count towards forgiveness.
  • If you’ve deferred your loans or had them in forbearance, a portion of that period of time may still count toward forgiveness. You may also have the option to make additional “catch-up” payments in order to receive credit for the full period.

Note that as part of the change-over from REPAYE to SAVE, there’s also a new feature coming for federal student loan borrowers in general: Starting in 2024, if you’re 75 days late on your payments, you’ll automatically be enrolled in whichever IDR is best for your situation — so long as you’ve granted access to your IRS information.

How does SAVE compare to other income-driven repayment plans

Before you can decide whether the SAVE student loan plan is right for you, it’s a good idea to get a sense of how it compares to the other IDR plans. Here they are for your consideration.

  • Income-Based Repayment (IBR): With IBR your payment is capped at 10% of your discretionary income if you borrowed your loans after July 1, 2014 or 15% if you borrowed earlier. However, your payment can never be more than the 10-year standard payment amount.
  • Income-Contingent Repayment (ICR): With ICR, your payment amount is generally the lesser of 20% of your discretionary income or the amount you would pay on a fixed payment plan over the course of 12 years, adjusted to your income.
  • Pay As You Earn (PAYE): With PAYE, you’re expected to pay 10% of your discretionary income, provided it’s less than your standard repayment amount.
  • Revised Pay As You Earn (REPAYE): The REPAYE plan — which is being replaced by SAVE — also requires that you pay 10% of your discretionary income. However, some other loan terms are more generous than the PAYE plan, such as the income subsidy.

Pros and cons of the SAVE student loan plan


 Your payment amount might be substantially lower: Borrowers with incomes below 225% of the poverty line may qualify for $0 monthly payments. In addition, borrowers with incomes above that amount will eventually only have to pay 5% of their discretionary income, compared to the 10%-to-20% of other IDR plans.

 Your balance won’t grow because of unpaid interest: As long as you keep up with your payments, you won’t have to worry about capitalized interest, which will help cut down on the amount of time it takes to pay your loan off in full.

 You no longer need your spouse to cosign your application: The SAVE plan removes the spousal signature requirement from the IDR application.


 You’ll have to wait for some benefits: While the SAVE plan officially goes into effect this summer, many of its key benefits won’t go into effect until July 2024. (See the table above for more specifics.)

 Longer forgiveness time for grad students: Unlike loans borrowed for undergraduate studies, grad school loans won’t have their balances forgiven until 25 years of payments.

 Parents not included: Unfortunately, those with parent PLUS or parent FFEL loans will still be limited to the Income-Contingent Repayment plan, and cannot use SAVE. If you have a parent loan, consider other options for student loan forgiveness.

How to apply for SAVE

While current REPAYE borrowers will automatically be enrolled in the SAVE plan, everyone else needs to fill out the IDR application to be enrolled.

You can manually choose the SAVE plan or allow the loan servicer to choose the plan with the lowest monthly payment. In many cases, that will also be the SAVE plan.

If you’re unsure of what plan you’re currently enrolled in, you can find out via the My Account page at

Students with federal student loans are eligible to apply for an IDR plan, which allows them to choose to enroll in SAVE. However, those with parent PLUS loans or loans held by commercial lenders won’t be eligible for this program.

Ultimately, the decision to change your student loan repayment plan is up to you. The information above can help you get started doing your research, but it’s also a good idea to contact the Federal Student Aid Information Center if you need more help weighing your options.

Under the SAVE plan, you may qualify for student loan forgiveness if you have borrowed $12,000 or less and have made 10 years of payments.

Borrowers with higher principal balances can also qualify, provided that they make an extra year of payments for each additional $1,000 borrowed. So, for example, if you’ve borrowed $14,000, your loans may be forgiven after 12 years of payments.

All loans taken for graduate school, however, must wait 25 years for forgiveness.

Depending on when you apply, you may be able to enroll in SAVE before payments resume. However, it may take your loan servicer a few weeks to receive information about your income and family size, so applying early is likely your best bet.