Question 1

What is the SAVE plan?

Accepted Answer

The SAVE plan replaced REPAYE in 2023, capping payments at 10% of discretionary income with a higher income exemption threshold.

Question 2

How does SAVE compare to PAYE?

Accepted Answer

SAVE uses 225% of the poverty line as the income exemption vs 150% for PAYE, resulting in lower payments for most borrowers.

Question 3

When does loan forgiveness happen?

Accepted Answer

Under income-driven plans, remaining balances are forgiven after 20-25 years depending on the plan.

Question 4

Is forgiven debt taxable?

Accepted Answer

Through 2025, forgiven student loan debt is not taxable under the American Rescue Plan.

Question 5

Should I choose the lowest monthly payment?

Accepted Answer

Not necessarily. Lower payments mean more interest accrues, potentially increasing total cost over the life of the loan.

Economize vs PAYE vs IBR: which saves you more?

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