SAVE Repayment Plan Calculator
Estimate your monthly student loan payments, understand interest subsidies, and plan for potential forgiveness under the new SAVE plan with our comprehensive SAVE repayment plan calculator.
Your SAVE Repayment Plan Calculator
Enter your financial details below to estimate your monthly payment under the new SAVE (Saving on a Valuable Education) Plan.
Your annual income after certain deductions. Found on your tax return.
Please enter a valid AGI (non-negative).
Include yourself and anyone else you support financially.
Please enter a valid household size (at least 1).
The total outstanding balance of your federal student loans.
Please enter a valid loan balance (non-negative).
Your average interest rate across all federal student loans.
Please enter a valid interest rate (0-20%).
Enter 100% if all loans are undergraduate, 0% if all are graduate, or a split.
Please enter a valid percentage (0-100%).
What is the SAVE Repayment Plan?
The SAVE (Saving on a Valuable Education) Repayment Plan is the newest income-driven repayment (IDR) plan offered by the U.S. Department of Education for federal student loans. It replaces the Revised Pay As You Earn (REPAYE) plan and offers significant benefits designed to make student loan payments more affordable and prevent loan balances from growing due to unpaid interest. This SAVE repayment plan calculator helps you understand its impact on your finances.
Who Should Use the SAVE Repayment Plan?
The SAVE plan is generally beneficial for a wide range of federal student loan borrowers, especially those with:
- Lower to moderate incomes: Payments are tied to your income and household size, making them more manageable.
- High loan balances relative to income: The plan’s interest subsidy prevents your balance from ballooning, even if your payment is low.
- Undergraduate loans: Payments for undergraduate loans are capped at 5% of discretionary income, down from 10% on other IDR plans.
- A desire for eventual loan forgiveness: The SAVE plan offers forgiveness after 20 or 25 years of qualifying payments, with a faster track for smaller loan balances.
- Families: The calculation of discretionary income is more generous, excluding a larger portion of your income from payment calculations.
Common Misconceptions About the SAVE Repayment Plan
- “It’s automatic forgiveness”: While the SAVE plan offers forgiveness, it’s not automatic. You must make qualifying payments for 20 or 25 years (or less for smaller original balances) and meet eligibility criteria.
- “My payments will always be $0”: Payments can be $0 if your income is low enough, but they increase as your income rises. The SAVE repayment plan calculator can show you how your income affects this.
- “It applies to all student loans”: The SAVE plan is only for eligible federal student loans. Private student loans are not eligible.
- “It’s the same as REPAYE”: While it replaces REPAYE, SAVE has key improvements, most notably the full interest subsidy and the reduced payment percentage for undergraduate loans.
- “It’s a one-time decision”: You can enroll in or switch to the SAVE plan, and you must recertify your income and household size annually to remain on the plan.
SAVE Repayment Plan Formula and Mathematical Explanation
Understanding the math behind the SAVE repayment plan calculator is crucial for grasping how your payments are determined. The core idea is to base your monthly payment on your “discretionary income,” which is a portion of your income deemed available for student loan payments after accounting for basic living expenses.
Step-by-Step Derivation of the SAVE Payment
- Determine Federal Poverty Line (FPL): The first step is to find the relevant Federal Poverty Line for your household size. The SAVE plan uses 225% of this amount as an income protection allowance.
- Calculate Discretionary Income Threshold: Multiply your FPL by 225% (2.25). This is the portion of your income that is protected and not considered for loan payments.
- Calculate Discretionary Income: Subtract the Discretionary Income Threshold from your Adjusted Gross Income (AGI). If this result is negative, your discretionary income is considered $0.
- Determine Payment Rate:
- For undergraduate loans, the payment rate is 5% of your discretionary income.
- For graduate loans, the payment rate is 10% of your discretionary income.
- If you have both, a weighted average is used based on the original principal balances of your undergraduate and graduate loans. Our SAVE repayment plan calculator uses the percentage of your total balance that is undergraduate.
- Calculate Annual Payment: Multiply your Discretionary Income by the applicable payment rate (or weighted average rate).
- Calculate Monthly Payment: Divide the Annual Payment by 12. This is your estimated monthly SAVE payment.
- Calculate Monthly Interest Accrued: This is your total loan balance multiplied by your annual interest rate, divided by 12.
- Determine Interest Subsidy: If your calculated Monthly Payment is less than the Monthly Interest Accrued, the government covers the difference. This means your loan balance will not grow due to unpaid interest while you are on the SAVE plan. If your payment covers all interest, there is no subsidy, and the excess goes to principal.
Variables Table
| Variable | Meaning | Unit | Typical Range |
|---|---|---|---|
| AGI | Adjusted Gross Income | Dollars ($) | $0 – $200,000+ |
| Household Size | Number of people in your household | Count | 1 – 8+ |
| Loan Balance | Total outstanding federal student loan principal | Dollars ($) | $5,000 – $200,000+ |
| Interest Rate | Weighted average annual interest rate of loans | Percentage (%) | 3% – 8% |
| Undergrad % | Percentage of total loan balance from undergraduate study | Percentage (%) | 0% – 100% |
| FPL | Federal Poverty Line for your household size | Dollars ($) | $14,580 (1 person) – $50,560 (8 people) |
| Discretionary Income | AGI – (225% of FPL) | Dollars ($) | $0 – AGI |
| Monthly Payment | Your calculated payment under SAVE | Dollars ($) | $0 – Varies |
| Interest Subsidy | Amount of monthly interest covered by the government | Dollars ($) | $0 – Monthly Interest Accrued |
Practical Examples: Real-World Use Cases for the SAVE Repayment Plan Calculator
Let’s look at a couple of scenarios to illustrate how the SAVE repayment plan calculator works and how different inputs affect your monthly payment and interest subsidy.
Example 1: Recent Graduate with Undergraduate Loans
Sarah recently graduated with a Bachelor’s degree and has a moderate income. She wants to understand her SAVE plan options.
- Adjusted Gross Income (AGI): $45,000
- Household Size: 1
- Total Federal Student Loan Balance: $25,000
- Weighted Average Interest Rate: 6.0%
- Percentage of Loans from Undergraduate Study: 100%
Calculator Output:
- Federal Poverty Line (1 person, 2023): $14,580
- Discretionary Income Threshold (225% of FPL): $14,580 * 2.25 = $32,805
- Discretionary Income: $45,000 – $32,805 = $12,195
- Annual Payment (5% of discretionary income for UG loans): $12,195 * 0.05 = $609.75
- Estimated Monthly SAVE Payment: $609.75 / 12 = $50.81
- Monthly Interest Accrued: ($25,000 * 0.06) / 12 = $125.00
- Monthly Interest Subsidy: $125.00 – $50.81 = $74.19
Interpretation: Sarah’s payment is very affordable at $50.81 per month. Crucially, the government covers $74.19 of her monthly interest, ensuring her loan balance does not grow, even though her payment doesn’t cover all the interest. This is a key benefit of the SAVE repayment plan.
Example 2: Established Professional with Mixed Loans and Family
David is an established professional with both undergraduate and graduate loans, and a family. He’s considering the SAVE plan.
- Adjusted Gross Income (AGI): $90,000
- Household Size: 4
- Total Federal Student Loan Balance: $80,000
- Weighted Average Interest Rate: 5.0%
- Percentage of Loans from Undergraduate Study: 50%
Calculator Output:
- Federal Poverty Line (4 people, 2023): $30,000
- Discretionary Income Threshold (225% of FPL): $30,000 * 2.25 = $67,500
- Discretionary Income: $90,000 – $67,500 = $22,500
- Weighted Payment Rate: (0.50 * 0.05) + (0.50 * 0.10) = 0.025 + 0.05 = 0.075 (7.5%)
- Annual Payment: $22,500 * 0.075 = $1,687.50
- Estimated Monthly SAVE Payment: $1,687.50 / 12 = $140.63
- Monthly Interest Accrued: ($80,000 * 0.05) / 12 = $333.33
- Monthly Interest Subsidy: $333.33 – $140.63 = $192.70
Interpretation: David’s payment is $140.63, which is significantly less than the $333.33 in interest accruing monthly. The SAVE plan covers the remaining $192.70 in interest, preventing his $80,000 balance from growing. This demonstrates the power of the interest subsidy for borrowers with higher balances or mixed loan types.
How to Use This SAVE Repayment Plan Calculator
Our SAVE repayment plan calculator is designed to be user-friendly and provide quick, accurate estimates. Follow these steps to get your personalized results:
Step-by-Step Instructions:
- Gather Your Information:
- Adjusted Gross Income (AGI): Find this on your most recent federal tax return (Form 1040, line 11). If your income has changed significantly, you might use your current income and project your AGI.
- Household Size: Count yourself, your spouse (if you file jointly), and any dependents you support.
- Total Federal Student Loan Balance: This is the sum of the outstanding principal balances of all your federal student loans. You can find this on your loan servicer’s website.
- Weighted Average Interest Rate: Calculate an average of your loan interest rates, weighted by their respective balances. If unsure, use an estimate or contact your servicer.
- Percentage of Loans from Undergraduate Study: Determine what portion of your total loan balance originated from undergraduate education versus graduate education.
- Input Data into the Calculator: Enter the gathered information into the corresponding fields in the SAVE repayment plan calculator.
- Review Error Messages: If you enter invalid data (e.g., negative numbers), an error message will appear below the input field. Correct these before proceeding.
- Click “Calculate SAVE Payment”: The calculator will instantly display your estimated results.
- Use “Reset” for New Scenarios: If you want to test different income levels or household sizes, click “Reset” to clear the fields and start fresh with default values.
- “Copy Results” for Sharing/Saving: Use this button to quickly copy the main results and key assumptions to your clipboard for easy sharing or record-keeping.
How to Read Your Results:
- Estimated Monthly SAVE Payment: This is the primary result, showing what you can expect to pay each month.
- Estimated Discretionary Income: This intermediate value shows the portion of your income that the SAVE plan considers available for loan payments.
- Monthly Interest Accrued: This is the total interest that would normally accumulate on your loans each month.
- Monthly Interest Subsidy: This crucial figure shows how much of your monthly interest the government will cover, preventing your loan balance from growing. If this is $0, it means your payment covers all accruing interest and some principal.
- Annual Impact Table: Provides a breakdown of how your payments are allocated over a year, showing borrower-paid interest, government-paid interest, and principal reduction.
- Chart: Visualizes the relationship between your monthly payment, total interest accrued, and the interest subsidy.
Decision-Making Guidance:
Use the results from this SAVE repayment plan calculator to:
- Budget Effectively: Understand your new, potentially lower, monthly payment.
- Prevent Balance Growth: See how the interest subsidy protects you from negative amortization.
- Compare with Other Plans: Use these figures to compare the SAVE plan against other IDR options or the Standard Repayment Plan.
- Plan for Forgiveness: Understand that lower payments might mean a longer repayment period before forgiveness, but without the penalty of a growing balance.
- Inform Future Decisions: Consider how changes in income, household size, or loan balance might impact your payments by re-running the SAVE repayment plan calculator.
Key Factors That Affect SAVE Repayment Plan Calculator Results
Several variables significantly influence your monthly payment and the benefits you receive under the SAVE plan. Understanding these factors is key to maximizing the advantages of this income-driven repayment option.
- Adjusted Gross Income (AGI): This is the most critical factor. As your AGI increases, your discretionary income rises, leading to a higher monthly payment. Conversely, a lower AGI results in a lower payment, potentially even $0. The SAVE repayment plan calculator directly uses your AGI to determine your payment.
- Household Size: A larger household size increases the Federal Poverty Line (FPL) used in the calculation. This, in turn, increases your income protection allowance (225% of FPL), reducing your discretionary income and thus your monthly payment. This is a significant benefit for families.
- Total Federal Student Loan Balance: While your loan balance doesn’t directly determine your payment amount (your income does), it heavily influences the amount of interest that accrues each month. A higher balance means more interest, making the interest subsidy feature of the SAVE plan more valuable if your payment doesn’t cover it.
- Weighted Average Interest Rate: A higher interest rate means more interest accrues monthly. If your payment is low, a higher interest rate will result in a larger portion of your interest being covered by the government’s subsidy, preventing your balance from growing. Our SAVE repayment plan calculator helps visualize this.
- Loan Type (Undergraduate vs. Graduate): The SAVE plan differentiates between undergraduate and graduate loans. Undergraduate loans have a lower payment rate (5% of discretionary income) compared to graduate loans (10%). Having a higher percentage of undergraduate loans will generally lead to a lower overall monthly payment.
- Federal Poverty Guidelines: These guidelines are updated annually and vary by household size. The SAVE plan uses 225% of these guidelines to determine your income protection. Changes in these guidelines can subtly affect your discretionary income and, consequently, your payment.
- State of Residence (Indirectly): While the calculator uses national FPL, actual FPL can vary by state (Alaska and Hawaii have higher FPLs). This can indirectly affect your payment by altering your income protection allowance.
- Marital Status and Tax Filing Status: If you’re married, your spouse’s income and whether you file taxes jointly or separately can impact your AGI and household size, thus affecting your SAVE payment. Generally, filing separately can sometimes lead to a lower payment if your spouse has a high income, but it might forfeit other tax benefits.
Frequently Asked Questions (FAQ) About the SAVE Repayment Plan Calculator
Q1: What is the main benefit of the SAVE plan compared to other IDR plans?
The primary benefit of the SAVE plan is the full interest subsidy. If your monthly payment doesn’t cover all the interest that accrues, the government covers the remaining interest. This means your loan balance will not grow due to unpaid interest, a common issue with other income-driven plans. Additionally, payments for undergraduate loans are reduced to 5% of discretionary income.
Q2: How often do I need to recertify my income for the SAVE plan?
You must recertify your income and household size annually. Your loan servicer will notify you when it’s time to recertify. Failing to do so can lead to your payments increasing or your loans being placed on a different repayment plan.
Q3: Can I switch to the SAVE plan if I’m currently on another IDR plan?
Yes, most borrowers on other income-driven repayment plans (like REPAYE, PAYE, IBR, ICR) can switch to the SAVE plan. If you’re on REPAYE, you’ll automatically be transitioned to SAVE. Our SAVE repayment plan calculator can help you see if switching is beneficial.
Q4: Does the SAVE plan offer loan forgiveness?
Yes, the SAVE plan offers loan forgiveness after 20 or 25 years of qualifying payments, depending on whether you have only undergraduate loans (20 years) or any graduate loans (25 years). There’s also a new provision for faster forgiveness for smaller original loan balances.
Q5: What happens if my income changes while on the SAVE plan?
If your income changes significantly, you can request an early recertification of your income. This can lead to an immediate adjustment of your monthly payment, either up or down, reflecting your current financial situation. Use the SAVE repayment plan calculator to model these changes.
Q6: Are all federal student loans eligible for the SAVE plan?
Most federal student loans are eligible, including Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans (for graduate students), and Direct Consolidation Loans. Federal Family Education Loan (FFEL) Program loans and Perkins Loans may become eligible if you consolidate them into a Direct Consolidation Loan.
Q7: How does household size impact my SAVE payment?
A larger household size increases the amount of income protected from your payment calculation (225% of the Federal Poverty Line). This means that for the same AGI, a larger household will generally result in a lower discretionary income and thus a lower monthly payment. Our SAVE repayment plan calculator accounts for this.
Q8: Can I use this SAVE repayment plan calculator for private student loans?
No, the SAVE plan is a federal student loan program. This calculator is specifically designed for federal student loans and the rules of the SAVE plan. Private student loans have different terms and repayment options.