Unlocking Savings: A Guide to Determining Your Eligibility for the SAVE Program

In November, the Biden administration introduced a new repayment program named SAVE (Saving on a Valuable Education) to assist numerous student loan borrowers by considering their income levels.

This program introduces a new income-driven repayment plan called SAVE, replacing the current REPAYE plan. Existing REPAYE participants will be automatically moved to SAVE.

This program provides a holistic solution for student loan relief, offering lower payments, easier application procedures, and faster loan forgiveness to help ease financial strain for borrowers.

SAVE provides substantial advantages in comparison to REPAYE. Especially noteworthy, individuals with discretionary income equal to or below 225 percent of the federal poverty guidelines could be eligible for monthly payments of $0.

This shows a rise from the 150 percent limit under REPAYE. Starting in July, the majority of borrowers will experience a 50% reduction in their monthly payments.

Undergraduate loan payments will be calculated at 5% of discretionary income, while graduate loan payments will be set at 10%.

Improved SAVE Program: Lower Payments,and Faster Loan Forgiveness

With SAVE, individuals who have federally held loans, such as direct subsidized, unsubsidized, and consolidated loans, can qualify for lower payments.

Married individuals who file taxes separately can now calculate their loan payments based on their individual incomes, removing the requirement for joint income-driven payment plan applications.

Furthermore, loan forgiveness timelines have been accelerated thanks to SAVE. Individuals with original undergraduate balances of $12,000 or less will qualify for forgiveness after only 10 years of payments, as opposed to 20 years under REPAYE.

Enrollment in SAVE will be automatic for borrowers already on REPAYE. If you are not enrolled in REPAYE, you can apply for SAVE through the Department of Education’s Federal Student Aid website.

Moreover, individuals who have defaulted on their loans may be eligible for SAVE under the Fresh Start initiative by the Department of Education.

Credit Karma’s student loan resource page provides tools to assist borrowers in managing their loans and understanding repayment choices.