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FMA Washington Report: March 8, 2024
Administration Touts New Student Loan Repayment Plan

The Saving on a Valuable Education (SAVE) Plan, launched by the U.S. Department of Education in August 2023, is a new income driven repayment (IDR) plan that helps to ease the financial burden of student loans. Tailored to offer the lowest monthly payments among IDR plans, SAVE adjusts payments based on income and family size and increases the income exemption to 225% of the federal poverty line. The plan also provides an interest subsidy for borrowers who make their monthly payments, so they don’t have to watch their balances grow. Because payments are calculated on a smaller portion of one’s income, monthly payments are lower for most borrowers.

Additionally, borrowers can benefit from SAVE’s lower monthly payments and interest subsidy while also pursuing loan forgiveness through the Public Service Loan Forgiveness (PSLF) Program. After the equivalent of 120 qualifying payments, PSLF forgives Direct loans for those in qualifying public service jobs, which includes work for government or 501(C)(3) non-profit organizations.

For more information about the SAVE Plan, click here.


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