Released: August 31, 2023

Why the SAVE student loan income-driven plan is a game changer

Source: Michelle Singletary, Washington Post (Paid Registration)

Under the Saving on a Valuable Education (SAVE) Plan — borrowers won’t see their balances grow even if their payments don’t cover the interest they owe. The plan eliminates 100 percent of the remaining interest for subsidized and unsubsidized loans after a scheduled payment is made.

SAVE calculates monthly payments based on a borrower’s income and family size. A single borrower earning $32,805 or less ($67,500 for a family of four) will not owe a loan payment. Borrowers who earn more would save more than $1,000 a year on their payments compared with other income-driven repayment plans.

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