Everyone’s financial goals are different, and there are other factors which might affect which repayment plans you are eligible for.
Every plan displayed in the Savi tool - with the exception of Standard - is an income-driven plan. Any Income-Driven plan (IDR) would be eligible for PSLF. However, they are calculated differently. If your goal is the lowest monthly payment, select the lowest available plan to you. If your goal is to pay off your loans as quickly as possible (this might mean a higher payment), select the plan that is most aligned with that goal.
What is the SAVE plan?
The SAVE Plan (Saving on a Valuable Education) is an income-driven repayment plan (IDR) offered by the Department of Education. It replaced the REPAYE Plan that was previously available.
How is my payment calculated under the SAVE plan?
The SAVE Plan calculates your monthly payment at 10% of your discretionary income. Discretionary income is the difference between your annual income and 225% of the poverty guideline for your family size and state of residence.
What loan types are eligible for the SAVE plan?
Eligible Loan Types include: Direct Subsidized, Direct Unsubsidized, Direct PLUS loans (graduate or professional students), and Direct Consolidation Loans which do not contain any Parent PLUS Loans.
What is the repayment period for the SAVE plan?
- 20 years if all loans you’re repaying under the plan were received for undergraduate study
- 25 years if any loans you’re repaying under the plan were received for graduate or professional study
Can I have my loans forgiven under the SAVE plan?
Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after the repayment period listed above.
Will my spouse's income be included in the SAVE plan?
If you're married and file your taxes jointly, your spouse’s income or loan debt will be considered when calculating your payment. If you are married but file separately, only your income will be considered.
What changes will be coming to the SAVE plan next year?
Since the SAVE plan is new, it's being implemented in two phases, with some benefits available now, and the rest available in Summer 2024. Next year, you can expect the following improvements:
- Your monthly payment will be 5% of your discretionary income for undergraduate loans, and 10% of discretionary income for graduate loans. If you have both undergraduate and graduate loans, you will have a monthly payment ranging from 5-10% based on the weighted average of your loan balances.
- Borrowers with starting loan balances under $12,000 will receive forgiveness on their remaining balance after 10 years. For each additional $1,000 on your loan balance, one additional year will be added to the forgiveness timeline (Ex: $13,000 = 11 years, $14,000 = 12 years, etc.) The maximum timeline to forgiveness is 20 years if you only have undergraduate loans, or 25 years if you have any graduate school loans. The forgiveness amount will be taxable in the year it is claimed if you are not eligible for PSLF.
Think carefully about your financial goals for your student loans, and which plan best aligns with those goals. Also note, for Income Driven Repayment plans, you need to recertify your income every twelve months. The plan you select will only reflect the payment amount until you recertify your income again the following year. This means that if your income increases, your payments will also increase. Same if your income decreases significantly.