Biden administration launches SAVE Plan, replacing REPAYE with lowest monthly payments ever

The U.S. Department of Education officially launches the Saving on a Valuable Education (SAVE) plan, replacing the Revised Pay As You Earn (REPAYE) plan as the most affordable income-driven repayment option. The SAVE plan uses 225 percent of the Federal Poverty Level (FPL) to determine discretionary income (up from 150 percent under REPAYE), meaning a single borrower with income below $32,805 qualifies for $0 monthly payments. SAVE caps undergraduate loan payments at 5 percent of discretionary income (half of previous 10 percent), with forgiveness after 10 years for borrowers with balances under $12,000. Education Secretary Miguel Cardona announces that borrowers will save approximately $1,000 per year. The plan is available to all Direct Loan borrowers.