The Saving on a Valuable Education (SAVE) Plan is a new income-driven repayment (IDR) plan introduced by The Biden Administration in 2023. It aims to relieve student loan borrowers by reducing monthly payments and offering loan forgiveness under certain conditions.

The SAVE Plan is available for all borrowers in repayment, regardless of their federal loan status. Borrowers with federally held loans, including Direct subsidized, unsubsidized, and consolidated loans, can benefit from the SAVE Plan. However, Parent PLUS loans are not eligible for SAVE.

Borrowers with Federal Family Education Loans, known as FFEL, or Perkins Loans that are held by a commercial lender rather than the Department of Education will need to consolidate into a Direct loan in order to qualify.

The SAVE Plan adjusts monthly payments based on a borrower's income, family size and tax filing status.

Borrowers who qualify will pay 5% of their discretionary income on undergraduate loans and 10% on graduate loans.

Borrowers earning $32,800 or less annually (or $67,500 or less annually for a family of four) won't be required to make payments on the SAVE Plan. Their remaining loan balance will be forgiven after making scheduled payments for a certain period (10 years for undergraduate loans of $12,000 or less, 20 years for larger undergraduate loans, and 25 years for graduate loans).

Borrowers can apply for the Revised Pay As You Earn (REPAYE) plan, which will automatically transition to SAVE when it takes effect.

The legal vulnerability of the SAVE Plan is uncertain but believed to be less vulnerable than the previous forgiveness plan struck down by the Supreme Court. The SAVE Plan relies on the Higher Education Act, which grants authority to the Secretary of Education.

Borrowers are able to apply for the SAVE plan from February 2024.