Continuing to review the disruption of student loan repayment programs:
“The SAVE Plan replaced the Revised Pay As You Earn (REPAYE) Plan. Borrowers who were on the REPAYE Plan automatically get the benefits of the SAVE Plan. Facts:
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The SAVE Plan is an IDR plan, so it bases your monthly payment on your income and family size.
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The SAVE Plan lowers payments for almost all borrowers compared to other IDR plans because your payments are based on a smaller portion of your adjusted gross income (AGI).
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The SAVE Plan gives borrowers who originally borrowed $12,000 or less forgiveness after as few as 10 years.
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More elements of SAVE will go into effect in summer 2024 and will lower payments even more for borrowers with undergraduate loans.” ~studentaid.gov
However, “The SAVE plan, introduced in 2023, was designed as the most affordable student loan repayment option in history. Its suspension means many borrowers must now transition to alternative plans that could dramatically increase their monthly obligations. Higher education expert Mark Kantrowitz notes that these changes might force borrowers to endure payment increases of 100-200% as they shift away from the SAVE plan. This sudden financial adjustment comes at a time when many Americans are already struggling with rising costs across multiple sectors of the economy.” ~rollingout.com
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