The SAVE Plan: How to Reduce Your Student Loan Payment
Be My Neighbor
Published on November 15, 2023
Student Loan Debt - SAVE Plan

The SAVE Plan: How to Reduce Your Student Loan Payment

SAVE Plan to the Rescue?

Navigating the world of student loans can be daunting. With the constant changes and updates, it’s easy to feel overwhelmed. However, the Fresh Start program offers a new ray of hope with defaulted federal student loans. Optimism is in the air, and here’s why. The SAVE plan!

Use Our Free Income-Driven Payment Calculator

What is the SAVE Plan?

man on youtube video

The latest income-driven repayment (IDR) plan is designed to assist borrowers. It calculates your monthly payment based on your income and family size. The most significant advantage of this new option is that it offers the lowest monthly payments compared to other IDR plans, making it accessible to almost all student borrowers.

Key Features of the SAVE Plan:

  1. Decreased Monthly Payments: The SAVE Plan has increased the income exemption from 150% to 225% of the poverty line. This change means a significant reduction in monthly payments for many borrowers. For instance, single borrowers earning $32,800 or less or a family of four earning $67,500 won’t owe any loan payments. Those earning more can expect to save at least $1,000 annually compared to other IDR plans.
  2. Elimination of Remaining Interest: One of the standout features is the elimination of 100% of the remaining interest for subsidized and unsubsidized loans after a scheduled payment. If you make your monthly payment, your loan balance won’t grow due to unpaid interest.
  3. Exclusion of Spousal Income: This plan doesn’t consider the spouse’s income for those married and filing separately. This change eliminates the need for a spouse to cosign the IDR application.

Use Our Free Income-Driven Payment Calculator

How Does the SAVE Plan Impact Mortgage Qualification?

While the plan offers a “grace period” for those unable to afford their student loan payment in October, it’s crucial to understand that not making your payment can hinder your ability to qualify for a mortgage or other financing. Staying informed and making timely decisions is essential to maintain your financial health.

How Do I Apply for the SAVE Plan?

The updated IDR application is now available. If you’re already enrolled in the REPAYE Plan or have recently applied, you’ll be automatically enrolled in the SAVE Plan, with no need to reapply.  If you need help enrolling in the SAVE Plan, I can recommend a company that will do all of the paperwork and filing for you for under $250.  Use the Free Income-Driven Payment Calculator and learn more applying for the SAVE Plan here.


This new option covers various loans, including Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans made to graduate or professional students, and Direct Consolidation Loans that did not repay any PLUS loans made to parents. However, some loans, like Direct PLUS Loans made to parents and loans currently in default, are ineligible for the SAVE Plan.

In Conclusion:

The introduction of the SAVE Plan is a testament to the continuous efforts to make student loan repayments more manageable for borrowers. With its array of benefits and the potential to save thousands annually, it’s a game-changer in the world of student loan payments.

If you’re navigating the complexities of student loans, now is the time to explore the SAVE Plan and its potential benefits for your financial future. Remember, with the right information and guidance, managing student loans can be a breeze. Let’s explore the possibilities together!

Be My Neighbor
Click to Call or Text:
(903) 202-2800