Updated Aug 30, 2023 - Economy

How to apply for the new student loan repayment plan

Illustration of an envelope, shaped like a graduation cap, stamped with a "payment due" notice

Illustration: Annelise Capossela/Axios

President Biden's new income-driven repayment plan launched in August as payments are set to resume after a years-long pandemic pause.

Why it matters: The Saving on a Valuable Education (SAVE) plan comes as the administration has proposed new debt alleviation options in the months since the Supreme Court torpedoed its historic relief program.

  • The new IDR plan is expected to help more than 20 million borrowers, per the administration.
  • Borrowers who enrolled in the days after the program was announced were expected to qualify when payments resume in October.

How it works: SAVE is an income-driven repayment plan.

  • Payments are calculated based on a borrower's income and family size, not loan balances.
  • Remaining balances are forgiven after a certain number of years.

Details: Borrowers can sign up on StudentAid.gov/SAVE. The Department of Education and loan servicers will reach out directly to about 30 million borrowers.

  • Payments will restart in October, after a pause in response to the COVID-19 pandemic.
  • Borrowers already signed up for the pre-existing Revised Pay-As-You-Earn (REPAYE) plan will be automatically enrolled in the SAVE plan.
  • People won't have to re-certify once they're enrolled.

By the numbers: Borrowers with annual income less than $30,000 will have a $0 monthly payment until their income increases.

  • Borrowers with a higher income may also have a $0 monthly payment depending on their family size.
  • The typical borrower will save about $1,000 per year through this plan, the White House said.

Flashback: The Biden administration forgave $39 billion of student loan debt in July for 804,000 borrowers.

What's next: Starting next summer, payments via SAVE will be cut in half (reduced from 10% of income to 5% of income).

  • Also next year, borrowers will receive credit toward forgiveness for certain periods of deferment and forbearance.

Go deeper: Who owes the most in federal student loans

Go deeper