SAVE payments are capped at 10% of a borrower's discretionary income — the difference between adjusted gross income and 225% of the federal poverty lineJust under 100,000 Bay Staters are enrolled in the federal government's SAVE Plan to pay back student debt, according to new data released Wednesday by the Biden-Harris Administration.that replaced the REPAYE Plan this summer. There were nearly 5.5 million borrowers enrolled nationwide as of Oct.
The SAVE plan is using a smaller piece of borrowers' adjusted gross income to calculate monthly payments, which is why it lowers payment amounts for almost everyone who uses it, according to the Department of Education. For borrowers whose payments don't cover monthly interest, the plan covers the remaining interest so the loan balance does not increase.
The SAVE Plan was launched in the summer of 2023; expanded benefits are expected to hit in summer 2024, including the further lowering of payments for borrowers with undergraduate loans, education officials said.