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Does the SAVE plan include loan forgiveness after a certain number of payments, similar to the IBR plan, or is it different in this regard? I'm trying to decide which plan to choose.
Does the SAVE plan include loan forgiveness after a certain number of payments, similar to the IBR plan, or is it different in this regard? I'm trying to decide which plan to choose.
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Abbey Johnson, Helping with Student Loan DocumentationAnswered on September 28,2023
IBR has forgiveness after 20 or 25 years worth of repayment, depending on if you're on IBR for old borrowers or new borrowers (i.e. the 2014 cutoff date)
SAVE requires 20 years of repayment if you have all-undergrad loans, 25 years if you have any grad loans. The early forgiveness criteria is a bit more complicated and also specific to SAVE
Borrowers with original principal balances of $12,000 or less will receive forgiveness of any remaining balance after making ten years of payments, with the maximum repayment period before forgiveness rising by one year for every additional $1,000 borrowed. For example, if your original principal balance is $14,000, you will see forgiveness after 12 years. Payments made previously (before 2024) and those made from now on will count toward these maximum forgiveness timeframes.
You as the borrower had to have borrowed under $12,000 in federal student loans to be eligible for forgiveness after 10 years of SAVE payments. If you have 3 loans that are $5k each, you as the borrower have $15k in original principal balance and you'd need to pay for 13 years
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Ultimate Guide on SAVE Plan - Payment Calculation, Interest, Forgiveness
Under the Saving on a Valuable Education (SAVE) plan, a single borrower who makes less than $15 an hour will not have to make any payments. Borrowers earning above that amount would save mor..Click here to get a detailed guide
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