A Guide to the SAVE Repayment Plan

The SAVE repayment plan was created to give federal student loan borrowers more affordable monthly payments and faster access to forgiveness. But the plan has faced legal challenges since 2024, and on March 10, 2026, a federal court issued an order blocking the Department of Education from implementing the SAVE Plan.

Millions of borrowers enrolled in the plan are now in administrative forbearance, although interest on the loans began accruing again in August 2025, and borrowers aren’t receiving any credit toward loan forgiveness. 

Meanwhile, the Department of Education is preparing for broader repayment changes mandated under new federal law. Here's what borrowers need to know about SAVE’s benefits, legal status, and how it compares with other student loan repayment options.

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What is the SAVE repayment plan?

The Saving on a Valuable Education (SAVE) Plan is a federal income-driven repayment (IDR) plan that launched in summer 2023 as the replacement for the Revised Pay As You Earn (REPAYE) Plan. Like other IDR programs, SAVE calculates your monthly payment based on your income and family size.

SAVE was designed to offer:

• Lower monthly payments for most borrowers
• A larger income exemption that reduces discretionary income
• A guarantee that balances would not grow due to unpaid interest
• Accelerated forgiveness for borrowers with initial balances of $12,000 or less

While these features made SAVE the most generous IDR plan, the plan is no longer available to new borrowers, and borrowers currently enrolled in the SAVE Plan must switch to a different repayment.

SAVE Plan status

After SAVE launched in 2023, several states filed lawsuits challenging its legality. In June 2024, a federal judge issued a preliminary injunction blocking the SAVE Plan.

In late 2025, the SAVE Plan remained active, but key benefits were legally blocked. Borrowers enrolled in SAVE were placed into mandatory forbearance — no principal payments were due, but interest began accruing again in August 2025. 

In March 2026, a court order ended the SAVE Plan. Starting July 1, 2026, loan servicers will begin sending notices to borrowers enrolled in SAVE. Each notice will include a specific deadline, and borrowers will have at least 90 days to switch to another repayment plan. 

If you’re enrolled in SAVE and don’t have any new federal loans issued on or after July 1, 2026, you can enroll in one of the following plans: 

• Standard Repayment Plan
• Extended Repayment Plan
• Graduated Repayment Plan
• Income-Based Repayment Plan
• Repayment Assistance Plan (RAP)

If you don’t select a new repayment plan, you will be moved into the Standard Plan automatically.

How does the SAVE repayment plan work?

The SAVE repayment plan was designed as the most generous IDR plan available. Here's a look at the key features:

Monthly payments

Monthly payments are calculated based on your discretionary income and family size. Under the SAVE Plan, the income exemption increased from 150% to 225% of the poverty line. The payments on undergraduate loans represent 5% of your discretionary income. For a mixture of undergraduate and graduate loans, your payment is a weighted average between 5% and 10% of your discretionary income. For many borrowers, this means a significant decrease in their monthly payments.

According to these calculations, an individual with an annual income of $32,800 or less would have a monthly payment of $0. A borrower with a family of four and an annual income of $67,500 or less would also get a $0 monthly payment.

Interest

In terms of interest, borrowers who keep up with their payments won't see their balance grow, even if their monthly payment isn't enough to cover the unpaid interest that's accrued since their last payment. After making a full scheduled monthly payment, the SAVE Plan eliminates 100% of the remaining monthly interest.

Loan forgiveness

Under the SAVE Plan, it's possible to take advantage of loan forgiveness in as few as 10 years if you initially took out $12,000 or less in student loans. The forgiveness timeline increases by one year for every additional $1,000 you initially took out. For example, if you borrowed between $12,001 and $13,000, your remaining loan balance could be forgiven after 11 years of payments.

SAVE Plan vs. other income-driven repayment plans

The SAVE Plan isn't the only income-driven repayment plan out there. Here's how these features stack up against other options:

SAVE Plan vs. PAYE

Under the Pay As You Earn (PAYE) Plan, your monthly payment is set at 10% of your discretionary income, which is calculated by subtracting 150% of the federal poverty line for your family size from your adjusted gross income (AGI). After making payments for 20 years, you may qualify for loan forgiveness.

In contrast, the SAVE Plan subtracts 225% of the federal poverty line for your family from your AGI. For undergraduate loans, the monthly payment represents 5% of your discretionary income. If you have both undergraduate and graduate loans, it's a weighted average between 5% and 10% of your discretionary income. Additionally, the SAVE Plan allows for forgiveness after as few as 10 years of payments.

However, while there's a cap for monthly payments under the PAYE Plan (if your income goes up, your payment will never be higher than what you'd pay under the Standard Repayment Plan), the SAVE Plan doesn't have this cap.

SAVE Plan vs. IBR

Under the Income-Based Repayment (IBR) Plan, monthly payments are 10% of your discretionary income if you borrowed after July 1, 2014, and your repayment term is 20 years. If you borrowed before that date, your monthly payments are 15% of your discretionary income, and your repayment term is 25 years.

The IBR Plan also offers the same monthly payment cap as the PAYE Plan.

SAVE Plan vs. ICR

Under the Income-Contingent Repayment (ICR) Plan, your monthly payment is either 20% of your discretionary income or what you'd pay on a fixed payment plan with a 12-year repayment term, adjusted to your income (whichever is less). After 25 years, you can qualify for loan forgiveness.

Like SAVE, the ICR Plan doesn't offer a payment cap.