Student Loan Repayment: What is Biden’s SAVE plan?

Student Loan Repayment: What is Biden’s SAVE plan?
The Saving on a Valuable Education plan, or SAVE, is a new income-driven repayment plan in which monthly loan payments take into account family size and discretionary income. More than 4 million people have enrolled so far.
Many income driven repayment plans have resulted in borrowers paying more interest and for longer.
SAVE calculates discretionary income above 225% of the federal poverty level versus previous regulations at 150%. Therefore, more income is protected.
There is also a 12 month on ramp period when missed payments will not impact your credit score or result in a loan default.
If your ultimate goal is loan forgiveness, do not take the on-ramp because this will not count towards your forgiveness threshold.
Loan balances will not grow due to unpaid interest with SAVE. Borrowers will not be charged any additional interest than what their payment covers.
SAVE will accelerate the path to loan forgiveness as long as borrowers make their payments on time. After 10 years, the remaining debt balance will be wiped out. For those with loan balances of $12,000 and less. Otherwise, the forgiveness period will increase by one year for everything additional $1,000 borrowed. So someone with a loan balance of $13,000 will take 11 years, $14,000 will take 12 years, and $15,000 will take 13 years to reach loan forgiveness. However, the maximum number of years in repayment is capped at 20 to 25 years depending on if it is for an undergraduate or graduate degree.
If you are enrolled in a REPAYE plan, a previous type of IDR, you will automatically be rolled over into the SAVE plan.
Works Cited:
https://www.wsj.com/personal-finance/student-loan-save-repayment-plan-95b256a7?mod=lead_feature_below_a_pos1
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