SAVE Plan Reviews: Pros and Cons Revealed

Written by Daisy Martinez
Last updated:
Reviewed by Daisy Martinez
Our site offers educational and informational content only, not professional financial advice. Consulting a financial advisor about your particular circumstances is best.
SAVE Plan Reviews Pros and Cons Revealed

Student loan repayment can be a significant financial burden for many people. You may find it difficult to navigate the various repayment options and choose the best plan for your situation. One available option is the SAVE plan for student loan repayment, which offers pros and cons. In this article, we have done in-depth research to provide the necessary information to decide if the SAVE plan is right for your needs.

What Is the SAVE Student Loan Plan?

The Saving on a Valuable Education SAVE PLAN is a new Student Loan repayment plan introduced by the Biden-Harris Administration to make loan repayments more affordable for millions of borrowers.

How does the SAVE plan work?

The SAVE plan is an income-driven repayment (IDR) plan that considers your income and family size to set affordable monthly payments. It differs from other IDR plans by using 225% of the federal poverty level to calculate discretionary income, instead of 150%. This means that you may have lower monthly payments with the SAVE Plan, which could make it easier to repay your student loan debt.

How Many Students Have Enrolled in Biden’s SAVE Student Loan Plan?

More than 4 million student loan borrowers have signed up for the SAVE plan, many of whom were previously enrolled in the REPAYE plan. The SAVE plan is the most affordable income-driven repayment plan ever, and since July 30, the Department of Education has received nearly 1.6 million applications for it. In the next section, we have shared “SAVE Plan Reviews: Pros and Cons Revealed.” Read on.

Pros Of SAVE Student Loan Plan

The SAVE Student Loan Plan has some impressive advantages that can make your student loan journey smoother. Whether you’re just starting your academic adventure or already knee-deep in student debt, these pros will catch your attention.

So, let’s explore what makes the SAVE Student Loan Plan a fantastic choice for many borrowers.

Affordable monthly payments

The SAVE Plan provides a more manageable alternative for student loan repayment by offering affordable monthly payments. Your payments will be based on a percentage of your discretionary income and family size, making it easier for you to manage your finances without feeling overwhelmed by your student loan debt.

More of your income is exempt.

With the SAVE Plan, more of your income is exempt than other income-driven repayment (IDR) plans. This means you can keep more of your earnings and still benefit from lower monthly payments, offering you greater financial freedom.

Cap on interest

One of the notable benefits of the SAVE Plan is the cap on interest for your student loans. Moreover, the government will pick up any unpaid interest, preventing your loan balance from ballooning and ensuring more manageable payments. This feature can save you significant money in the long run.

Forgiveness after as little as ten years

Under the SAVE Plan, your student loans will be forgiven after ten years of consistent on-time payments if you work in the public service sector. Forgiveness is still available after 20 years of on-time payments for those not in public service for those not in public service. This gives you a light at the end of the tunnel, knowing your loan balance will eventually be gone.

Excludes your spouse’s income

The SAVE Plan allows you to exclude your spouse’s income when calculating monthly payments if you file your taxes separately. This can be a significant benefit, as it may result in lower monthly payments than other IDR plans that consider your and your spouse’s income.

More SAVE benefits to start next year

Next year, bring even more goodies to the SAVE Student Loan Plan, making it an even more appealing choice for borrowers. Here’s a sneak peek at the benefits you can look forward to:

  • Lower Interest Rates: Starting next year, the SAVE Plan is set to offer even lower interest rates, helping you save more money over the life of your loan.
  • Extended Grace Period: You will have more time before you need to start paying back your loans. This gives you more time to get settled in your job after school.
  • More Flexible Repayment Options: You will have more choices about how to pay back your loans. This will make finding a payment plan that works for you easier.
  • Better Customer Support: You will have better access to help with your student loans. This includes online tools and resources to help you manage your loans.

Keep an eye out for these changes. They will help you get the most out of the SAVE Plan and make paying back your student loans easier.

Cons of the SAVE Student Loan Plan

While the SAVE plan has its advantages in providing a more affordable repayment option, there are potential issues that borrowers should be aware of. 

Let’s take a moment to explore the cost so you can decide whether the SAVE Student Loan Plan is the right fit for your needs.

Borrowers with mid-level balances don’t stand to benefit as much.

Although the SAVE plan is designed to help lighten the burden of student loan repayment, some borrowers may not benefit as much as others. In particular, borrowers with mid-level balances might not see a significant reduction in their monthly payments compared to other repayment options, as the plan primarily targets borrowers with high debt-to-income ratios. As a result, you should carefully assess your financial situation to determine whether this plan is the best option for you.

Monthly payment adjusts as income changes.

One potential downside of the SAVE plan is that your monthly payment can adjust depending on your income. If your income increases, so too might your monthly payment. This can be challenging for borrowers who may have fluctuations in their income, as their monthly payments may not be predictable. It’s essential to consider whether you’re comfortable with the possibility of changing monthly payments before committing to this repayment plan.

The SAVE plan isn’t available for Parent PLUS borrowers

Unfortunately, the SAVE plan is unavailable for those with Parent PLUS loans. These borrowers must explore alternative repayment options, such as income-contingent repayment plans, which adjust monthly payments based on income. 

The plan could lead to an increased risk of default if borrowers struggle with adjusting their monthly payments and face difficulty navigating the plan’s requirements. 

The plan does not provide an interest subsidy, which can result in higher overall repayment costs for some borrowers.

The SAVE Student Loan Plan does indeed consider spousal income when determining monthly payment amounts. For married borrowers who file jointly, their spouse’s income may cause their monthly payment to increase, making the SAVE Plan less beneficial than initially anticipated.

Therefore, you should carefully weigh the pros and cons of the SAVE plan before choosing it as your repayment strategy. Be mindful of the pitfalls mentioned above and consult with your student loan servicer to make the most informed decision possible.

SAVE Plan vs. REPAYE Plan

When considering income-driven repayment options for your student loans, it’s essential to understand the key differences between the Saving on a Valuable Education (SAVE) Plan and the Revised Pay As You Earn (REPAYE) Plan.

The SAVE Plan is a newer income-driven repayment (IDR) plan that sets monthly payments at 5% to 10% of discretionary income, depending on your income level. This plan aims to offer borrowers the most affordable student loan repayment option.

On the other hand, the REPAYE Plan calculates your monthly payment as 10% of discretionary income, regardless of your income level. This plan also offers interest subsidies and loan forgiveness after a certain period.

Here is a comparison table to help you understand the differences between these two plans:

FeatureSAVE PlanREPAYE Plan
Payment Percentage5% – 10% of discretionary income10% of discretionary income
Payment CapNo payment capLimited to Standard Repayment Plan amount
Interest SubsidyNoneYes, for subsidized loans
Loan ForgivenessAfter 20 – 25 yearsAfter 20 – 25 years
Marital Status ImpactNot consideredConsidered under certain conditions

The SAVE Plan has replaced the REPAYE Plan as the most generous income-driven repayment (IDR) plan for most borrowers. Borrowers on the REPAYE Plan have been automatically enrolled in the SAVE Plan. Borrowers cannot apply for the REPAYE Plan in the future.

While both plans offer income-driven repayment options, the SAVE Plan might be more suitable for those with a lower income, as it has lower payment percentages. However, borrowers with subsidized loans might benefit more from the REPAYE Plan, which offers interest subsidies.

The best way to determine which IDR plan is right for you is to consider your financial situation and consult a financial advisor. Here are some general guidelines:

  1. The SAVE Plan will likely be your best option if you have a low income.
  2. If you have a high income, you may be better off with a different repayment plan, such as the Standard Repayment or Graduated Repayment Plan.
  3. If you have undergraduate and graduate loans, the SAVE Plan will calculate your monthly payment based on an average of your undergraduate and graduate loan balances.
  4. If you are pursuing Public Service Loan Forgiveness (PSLF), the SAVE Plan will qualify you for forgiveness after 120 months of qualifying payments.

Important note: The SAVE Plan is still under development,t, and some details may change. Be sure to check the Federal Student Aid website for updates.

How Much Will You Pay Each Month?

Let’s talk about the dollars and cents. You’re probably wondering, “How much do I need to pay every month with the SAVE Student Loan Plan?” It’s a common question; the answer depends on a few things. Let’s break it down in simple terms and figure out how the SAVE Plan calculates your monthly payment.

Save Student Loan Plan Chart

To understand the SAVE Plan’s monthly payments, look at the Save Student Loan Plan Chart. This chart clearly and concisely represents the potential savings and monthly payment amounts.

From above, you show that the SAVE Plan reduces your monthly payment, resulting in monthly savings. Your specific payment amount will depend on the original loan amount and the terms of the SAVE Plan. The higher your original loan amount, the more significant your monthly savings could be.

Note: These figures are meant to serve as an example, and your specific situation may differ. Consult with a financial professional or utilize online tools to get a clearer picture of your potential savings with the SAVE Plan.

How to Enroll in the SAVE Plan?

The SAVE Plan is a great way to manage your student loans effectively. It’s easy to enroll in, and we’ll walk you through the steps step-by-step. Whether you’re new to the SAVE Plan or you’re looking to switch to it from another plan, this section will help you get started.

When can you apply for the SAVE Plan?

You can apply for the SAVE Plan as soon as it becomes available through the Education Department under the Biden Administration’s initiatives. Keep an eye on the White House and Education Department updates to stay informed about the enrollment period.

How do you apply for the SAVE Plan?

Here are the steps to apply for the SAVE plan:

  • Go to the Federal Student Aid website: and log in to your account.
  • Click on the “My Aid” tab.
  • Under “My Loans,” click on “Manage My Loans.”
  • Scroll to the “Change My Repayment Plan” section and click “Change My Plan.”
  • Select the “SAVE Plan” and click on “Continue.”
  • Review your information and click on “Submit.”

What if you are already on an IDR plan?

If you’re already on an income-driven repayment (IDR) plan, such as Income-Contingent Repayment (ICR), you can still consider enrolling in the SAVE Plan. Before switching, evaluate the potential benefits, such as lower monthly payments or shorter repayment periods. Remember to thoroughly review the terms of the SAVE Plan to ensure it is the best fit for your financial situation.

Which Loans are eligible for the SAVE Plan?

The following federal student loans are eligible for the SAVE Plan:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans made to graduate or professional students
  • Direct Consolidation Loans that did not repay any PLUS loans made to parents

The SAVE Plan primarily targets federal student loans. However, not all federal loans may be eligible for the program. For example, many PLUS loans for parents are not eligible. If you have FFEL loans or Perkins loans, you may need to consolidate them into direct loans to be eligible for the SAVE Plan, but you may lose some benefits. So, make sure you understand the pros and cons before you consolidate.

Borrowers with FFEL loans or Perkins loans may need to consolidate them into direct loans to be eligible for the SAVE Plan. However, it is important to note that consolidating your loans may cause you to lose some benefits, such as the ability to qualify for Public Service Loan Forgiveness (PSLF).

Official site URL: Federal Student Aid: SAVE Plan:

Pay close attention to the specific loan types covered, such as Direct Loans, and verify if your loans qualify. It would be best to consider any potential impacts on loan forgiveness opportunities while in the SAVE Plan.


The SAVE Plan is a new and exciting option for student loan borrowers. It offers several advantages over other income-driven repayment plans, and it could make a big difference in the lives of many borrowers.

If you’re interested in learning more about the SAVE Plan, or if you’re not sure if it’s right for you, be sure to check out the Federal Student Aid website. You can also talk to a financial advisor to get personalized advice.

Frequently Asked Questions

Is there an income cap to qualify for the Save Plan?

There is no specific income cap to qualify for the Save Plan. However, your eligibility may depend on the specific program or lender you’re considering. It’s important to review the requirements and terms of each plan before deciding on the best option for your situation.

Is Save Student Loan Plan For Married Couples?

The SAVE Plan has two new rules for married borrowers:

  • Married couples who file taxes separately can exclude their partner’s income when calculating their monthly payments. This meant their payments would be lower than if they filed taxes jointly.
  • Married couples no longer need to co-sign IDR applications, regardless of whether they file taxes jointly or separately. This means that each spouse can apply for the SAVE independently.

Is Save Student Loan Plan For High Income Earners?

The SAVE Plan can also be good for high-income earners. It can help them get better repayment terms, lower interest rates, or combine their loans into one loan to make them easier to manage. It’s important to look at your current financial situation to decide if the SAVE Plan is right for you.

What are the repayment options available?

Various repayment options are available for the Save Plan, depending on your circumstances and your specific plan. Some common repayment options include:

  • Standard Repayment: Fixed monthly payments for the term of the loan.
  • Graduated Repayment: Monthly payments start low and gradually increase over time.
  • Income-Driven Repayment: Monthly payments are determined by your income and family size and may be adjusted annually.

Which loan servicing companies work with the U.S. Department of Education?

Various loan servicing companies work with the U.S. Department of Education, including:

Working closely with your chosen loan servicer is crucial to ensure you’re making timely payments and managing your student loan debt effectively.

Photo of author

Daisy Martinez

Daisy Martinez is the Founder, writer, and editor. Armed with a strong background in Personal Finance, Daisy is deeply committed to equipping people with the financial tools and knowledge they need. As a proud mother to a delightful daughter, she understands firsthand the importance of financial planning for a family's future. Since founding, Daisy has been at the forefront of delivering content that helps people make savvy financial choices.

Disclaimer: The opinions, analyses, and information expressed by this author are for informational purposes only and do not constitute financial, investment, or other professional advice. Always conduct thorough research and consult with a professional before making any investment decisions.

Leave a Comment