Once the plan is in full swing next summer, many borrowers’ monthly bills, per dollar, will drop 40 percent compared with the REPAYE plan. But the lowest earners may see their payments fall 83 percent, while the highest earners would receive only a 5 percent reduction.
Are there any changes for borrowers with small loan balances?
Yes, but this feature takes effect next summer.
People who took out smaller loans — or those with original balances of $12,000 or less — would make monthly payments for 10 years before cancellation, instead of the more typical 20-year repayment period in other income-driven repayment plans. Every $1,000 borrowed above the $12,000 amount would add one year of monthly payments before the balance was forgiven, up to a maximum of 20 or 25 years.
Will the new plan always be the best option?
The SAVE plan is expected to provide the lowest payment for most borrowers and will probably be the best option for most. The loan simulator tool at StudentAid.gov can help you analyze which repayment plan makes the most sense given your circumstances and goals.
When you sign in, it should automatically use your loans in its calculations. (You can add other federal loans if any are missing.) You can also compare plans side by side — how much they’ll cost over time, both monthly and in total, and if any debt would be forgiven.
How do I sign up?
You can sign up online at StudentAid.gov/SAVE; borrowers will be able to see their payment amount before signing up. Administration officials said the process shouldn’t take more than 10 minutes. After applying, you can check the status of your application by visiting your account dashboard.
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