A Student Loan Update: Repayment Plans

For the first time in over three years, student loan payments will be due. Interest will start accruing again on September 1st, 2023, and payments are set to resume in October.

After a long battle for debt relief, with full loan forgiveness still a distant dream, borrowers can still count on income-driven repayment plans to help ease the load as they make loan payments. The newest repayment plan available to borrowers is set to make loan repayment less burdensome than ever. In fact, the Biden-Harris Administration is calling it the most affordable repayment option in history.

The Saving on A Valuable Education (SAVE) plan is, like all income-driven plans, based on your income and family size, not the amount of your loans. It will replace the current plan, the Revised Pay As You Earn (REPAYE) Plan, and those using REPAYE will automatically receive the benefits of the SAVE plan.

SAVE will bring some significant changes. It will increase the income exemption from 150% to 225% of the poverty line, meaning the amount of your monthly payment can be significantly decreased. The plan also gets rid of 100% of the remaining interest for subsidized and unsubsidized loans after a payment is made, meaning your loan balance won't increase because of remaining interest. Additionally, spousal income is excluded for married borrowers filing separately.

As far as monthly payments go, a borrower filing single and earning less than $32,805 a year, or a family of four earning less than $67,500 a year, could be set to pay $0 a month.

A beta version of the application is now available, but during this beta testing period, the application may not be consistently available. If you are already on the REPAYE Plan, there is no need to apply for SAVE.

See the studentaid.gov official IDR fact sheet for more.