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Saving on a Valuable Education (SAVE) Repayment Plan

President Biden announced a new income-driven repayment (IDR) plan that would drastically reduce student loan borrowers’ monthly payments and help eliminate unpaid interest accrual called the Saving on a Valuable Education Repayment Plan or SAVE. 




The SAVE Plan will be completely rolled out on July 1, 2024. However, three key items are being implemented before the payment pause ends:


  • The amount of income that is protected from payments in the calculation for the SAVE plan is increasing from 150% to 225% of the federal poverty guidelines for the borrower’s family size. This means that more of your income is protected, therefore lowering your monthly payments. 

  • The U.S. Department of Education will stop charging any monthly interest not covered by the borrower’s monthly SAVE payment. This means that borrowers will not see their balances balloon while making their monthly payments in SAVE. 

  • Married borrowers who file their taxes separately will no longer be required to include their spouse’s income in their payment calculation for the SAVE Plan. 


Here are the changes that will be implemented in July 2024:


  • Payments on undergraduate loans will be cut in half, from 10% to 5% of discretionary income (the income above 225% of the federal poverty guidelines). Borrowers with a mixture of undergraduate and graduate loans will pay a weighted average between 5% and 10% of their discretionary income.

  • Borrowers who originally borrowed $12,000 or less will receive debt cancellation after 120 payments, or ten years’ worth of payments. Cancellation will be available on a sliding scale requiring an additional year of payments for every $1,000 originally borrowed. The chart below provides examples of the cancellation timelines. Like other income-driven repayment plans, borrowers enrolled in these plans are eligible for cancellation after 20 or 25 years in repayment.

Amount Originally Borrowed
Timeline to Cancellation
Up to $12,000
10 years
Up to $13,000
11 years
Up to $14,000
12 years
Up to $15,000
13 years
Up to $16,000
14 years



The following Direct Loans are eligible for SAVE: 

  • Direct Subsidized Loans

  • Direct Unsubsidized Loans

  • Direct Grad Plus Loans 

  • Direct Consolidation Loans (with the exception of loans to repay Parent Plus Loans). 


If you have Federal Family Education Loans (FFEL) or Perkins Loans, you may be able to consolidate your loans to make them eligible for SAVE. Parent PLUS Loans are excluded from the SAVE Plan. 


How to Enroll


You can enroll in the SAVE Plan by contacting your servicer or by signing up online at Borrowers who are currently enrolled in the Revised Pay As You Earn (REPAYE) Plan will be automatically enrolled in the SAVE Plan.

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