Update: Due to a court injunction, the SAVE plan has been paused since August 2024, and as of March 27, 2025, borrowers can no longer enroll in the plan. As of August 1, 2025, borrowers in the SAVE forbearance will have their loans begin accruing interest, and months spent in this plan will no longer count toward forgiveness.
The Saving on a Valuable Education (SAVE) plan is a federal loan repayment plan that falls under the umbrella of income-driven repayment (IDR). This plan replaced Revised Pay As You Earn (REPAYE) in August 2023.
The plan will initially be based on 10% of discretionary income for all eligible Direct Loans; however, it will increase the income exception from 150% to 225% of the poverty line. The plan excludes spousal income for those who are married and filing separately.
Additional changes will be implemented to SAVE in July 2024. Payments under SAVE on undergraduate loans will go down to 5% of discretionary income. Borrowers with undergraduate and graduate loans will pay a weighted average between 5% to 10% based on the original principal balance of loans. Additionally, the forgiveness timeline under SAVE can be shorter. For borrowers with an original loan balance of $12,000, after 10 years of payments in SAVE, the remaining balance can be forgiven. The time period for forgiveness increases by a year for every additional $1,000 in original loan balance, up to 20 years for undergraduate loans and 25 years for graduate loans. Payments made before 2024 will count towards the new maximum forgiveness timeline under SAVE.
Borrowers who are married and filing separately will not have their spouse's income included in their monthly payment calculation for the SAVE plan.
Borrowers can switch from SAVE to Income-Based Repayment (IBR) to pursue IDR forgiveness. Borrowers who switch will have their past payments count toward their forgiveness timeline.
Current loan holders enrolled in SAVE can remain enrolled in this plan through July 1, 2028, but must switch into IBR, if eligible, RAP, or the new standard plan by 2028.
Interest Subsidy
Once a borrower makes their full monthly payment, 100% of the remaining monthly interest balance is eliminated on subsidized and unsubsidized loans. In other words, the loan balance won't accrue due to unpaid interest.