SAVE Plan

SAVE Plan: The SAVE (Saving on A Valuable Education) Plan is a federal student loan repayment plan designed to make loan payments more manageable for borrowers. It adjusts monthly payments based on income and family size, ensuring that individuals do not pay more than a certain percentage of their discretionary income toward their loans. This plan also offers loan forgiveness after a specified period of consistent payments.

Examples:

• If a borrower earns $40,000 a year with a family size of three, their monthly payment under the SAVE Plan might be capped at a percentage of their discretionary income, potentially leading to lower payments compared to other plans.
• A recent graduate working in a nonprofit organization may qualify for $0 monthly payments if their income is low, allowing them to focus on their career without the burden of student loan payments.

Cases:

• Case 1: A teacher with a salary of $50,000 and two Dependents could see their monthly payment reduced significantly, helping them manage their living expenses more effectively.
• Case 2: A borrower in a financial hardship situation might find that the SAVE Plan allows them to avoid defaulting on their loans, providing a safety net during tough economic times.