Summary:
Definitions:
SAVE: The SAVE IDR plan is a new income-driven repayment (IDR) plan that was created by the U.S. Department of Education in 2023. It is designed to make student loan repayment more affordable for borrowers with lower incomes.
IDR: Income-driven repayment (IDR) plans are a type of student loan repayment plan that bases your monthly payment on your income and family size. There are four different IDR plans: PAYE, IBR, REPAYE, and the new SAVE IDR plan.
Poverty line: The poverty line is the income level below which a family is considered to be living in poverty. The poverty line is different for different family sizes and is updated annually.
Full payment requirements: The full payment requirement is the amount you would have to pay each month if you were repaying your student loans on a standard 10-year repayment plan.
Loan forgiveness requirements: Loan forgiveness is a process that allows you to have your student loans forgiven after meeting certain requirements. The requirements for loan forgiveness vary depending on the type of loan forgiveness program you are enrolled in.
Maximum loan amounts: The maximum loan amount you can borrow depends on the type of student loan you are applying for and your financial need.
According to the table from studentaid.gov , borrowers with an income of $32,800 or less per year (or roughly $15 per hour) will not have to make any payments under the SAVE Plan, regardless of their family size. This is because their adjusted discretionary income would be zero.
Borrowers with an income of more than $32,800 per year will have to make monthly payments under the SAVE Plan. The amount of their payment will depend on their income and family size. For example, a borrower with an income of $60,000 per year and a family size of two would have a monthly payment of $227.
The table also shows that borrowers with an original principal balance of $12,000 or less will be eligible for loan forgiveness after making 10 years of payments under the SAVE Plan. This means that the remaining balance on their loans would be forgiven after they have made 10 years of payments.
Here is a summary of the key points from the table:
Borrowers with an income of $32,800 or less per year will not have to make any payments under the SAVE Plan.
Borrowers with an income of more than $32,800 per year will have to make monthly payments under the SAVE Plan. The amount of their payment will depend on their income and family size.
Borrowers with an original principal balance of $12,000 or less will be eligible for loan forgiveness after making 10 years of payments under the SAVE Plan.
I hope this is helpful! Let me know if you have any other questions.
Here are some additional things to keep in mind about the SAVE IDR plan:
The plan is available to borrowers with federal student loans, including Direct Loans, Federal Family Education Loans (FFELs), and Perkins Loans.
The plan has no loan forgiveness option. However, borrowers who make 20 or more consecutive payments under the plan may be eligible for a credit toward PSLF.
The plan is a good option for borrowers who are struggling to afford their student loan payments. However, it is important to note that the monthly payments may be higher than other IDR plans, such as the PAYE or REPAYE plans.
If you are considering the SAVE IDR plan, it is important to speak with a financial advisor to get personalized advice.
Prompt Engineer: Travis Stone
AI: Bard
Data: https://studentaid.gov/announcements-events/save-plan
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