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Everything you Need to Know about the SAVE Plan for Student Loans in 2025
By
Kira Ranieri
Kira is a content writer at Scholarships360. Kira earned a Bachelor of Media and Journalism with a concentration in Advertising and Public Relations from the University of North Carolina at Chapel Hill.
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Caitlyn Cole is a college access professional with a decade of experience in non-profit program and project management for college readiness and access organizations.
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Maria Geiger is Director of Scholarship Services at Scholarships360. She is a former online educational technology instructor and adjunct writing instructor. In addition to education reform, Maria’s interests include viewpoint diversity, blended/flipped learning, digital communication, and integrating media/web tools into the curriculum to better facilitate student engagement. Maria earned both a B.A. and an M.A. in English Literature from Monmouth University, an M. Ed. in Education from Monmouth University, and a Virtual Online Teaching Certificate (VOLT) from the University of Pennsylvania.
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It’s no secret that life post-graduation brings a lot of changes, and when student loans are added to the mix, this can mean a new monthly payment that only adds to the stress of this transition. In order to make it so Americans can repay their student loans in a way that is still affordable, income-driven repayment (IDR) plans were introduced. The Saving on a Valuable Education (SAVE) Plan was a popular IDR plan introduced in 2023, but as of 2025 the SAVE plan has been paused and is set to shut down in June of 2028. Keep reading to learn more about the SAVE plan, what current borrowers on the SAVE plan should know, and what is expected to replace the SAVE plan in the future.
What is the SAVE plan?
The Saving on a Valuable Education (SAVE) Plan is an Income-Driven Repayment (IDR) plan for federal student loans that was introduced in August 2023 and stopped accepting applications in early 2025. Most IDR plans are based on your gross income, but whereas the SAVE plan is based on your discretionary income. Your discretionary income, unlike your gross, takes into account your family size. Your family size counts yourself, your spouse, and your dependents.
Another important factor of the SAVE plan is that the U.S. Poverty Guideline exemption has been increased from 150% to 225%. Therefore, if your discretionary income is calculated at $0, your monthly payment would also be $0. On average, borrowers who do not meet the minimum income requirement saved about $1,000 a year.
In 2024, new legislation was brought forth that paused the SAVE plan and placed all borrowers enrolled under an interest-free general forbearance. Then in the summer of 2025, the U.S. Department of Education announced that as of August 1, 2025, interest will start accruing again.
What should borrowers enrolled in the SAVE plan do now?
The U.S. Department of Education is strongly encouraging the nearly 8 million borrowers enrolled in the SAVE plan to switch to a new repayment plan. This would mean that you would resume payments, but you would avoid accruing a higher balance due to the now active interest rate. Borrowers who take out their loans before July 1, 2026 will still have access to an IDR plan called Income-Based Repayment (IBR) or they can switch to a standard repayment plan.
What are income-driven repayment plans?
An Income-Driven Repayment (IDR) plan allows borrowers with federal student loans to adjust their monthly payment based on their income and family size. Besides the SAVE plan, there were three other IDRs offered by the federal government, though due to new legislation, only the Income-Based Repayment (IBR) plan is still available to select borrowers.
Plans no longer offered:
- The Pay As You Earn (PAYE) Repayment plan
- The Income-Contingent Repayment (ICR) plan.
A new IDR is expected to launch July 1, 2026 called the Repayment Assistance Plan (RAP). Here is a brief overview of what borrowers would pay with RAP:
- Borrowers earning no more than $10,000 would be asked to pay $10 a month.
- Earn more than $10,000 but not more than $20,000, and your payment will be based on 1% of AGI.
- More than $20,000 but not more than $30,000, it would be 2% of AGI and so on up the income scale.
- Repayment caps out at 10% of AGI for borrowers earning $100,000 a year or more.
Learn more: Student Loan Definitions
Key Takeaways
Frequently asked questions about the SAVE Plan
Is the SAVE plan no longer available?
How long can I stay on the SAVE plan?