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Which is better SAVE or IBR?

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Abbey Johnson, Helping with Student Loan Documentation
Answered on September 28,2023

There is no singular right answer here, it heavily depends on the borrower's specific loan debt and income situation.

SAVE has a more generous discretionary income calculation (225% instead of 150% of the applicable poverty guideline), will require you to pay between 5%-10% of that depending on the undergrad-grad loan ratio (old IBR is 15% and new IBR is 10%), and waives any monthly accrued unpaid interest. That said, there is no cap on how high the payment can go if your income increases and if you have grad school debt it has a 25 year forgiveness timeline instead of 20

IBR caps your payments as "never more than the 10-year Standard plan amount at the time you enrolled in the IBR plan" so late career income increases won't skyrocket your payment (REPAYE/SAVE has no cap) and a 20 year forgiveness timeline if you qualify for new IBR. That said, it doesn't have anywhere near as nice of an interest subsidy so if your payment is low you can have interest pile up

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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..
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