SAVE Repayment Plan Calculator
Estimate your monthly student loan payments under the Saving on a Valuable Education (SAVE) plan.
What is a SAVE Repayment Plan Calculator?
The SAVE Repayment Plan Calculator is a specialized financial tool designed to estimate your monthly payment for U.S. federal student loans under the Saving on a Valuable Education (SAVE) Plan. This income-driven repayment (IDR) plan calculates your payment based on your income and family size, often resulting in a lower, more manageable monthly bill. Unlike generic loan calculators, a SAVE calculator understands the specific rules of this federal program, such as how it defines discretionary income and handles unpaid interest. It’s an essential tool for anyone considering enrolling in the SAVE plan to understand their potential savings and long-term repayment outlook.
This calculator is for borrowers with federal Direct Loans who want to see how much they could pay each month. The plan is particularly beneficial for low-to-middle-income individuals, as many may qualify for a $0 monthly payment. For more information, you can compare income-driven repayment plans to see which is best for you.
SAVE Repayment Plan Formula and Explanation
The SAVE plan’s core benefit comes from its unique formula for calculating discretionary income, which protects more of your earnings from being counted towards your student loan payment. The formula is:
Monthly Payment = (AGI – 225% of Federal Poverty Line) * Payment Percentage / 12
The ‘Payment Percentage’ is currently 10% of discretionary income for all loans. However, starting in July 2024, this will drop to 5% for undergraduate loans and a weighted average between 5% and 10% for borrowers with both undergraduate and graduate loans. Another critical feature is the interest subsidy: if your monthly payment doesn’t cover the interest accrued that month, the government waives the remaining interest, preventing your loan balance from growing.
| Variable | Meaning | Unit | Typical Range |
|---|---|---|---|
| AGI | Adjusted Gross Income | USD ($) | $0 – $200,000+ |
| Federal Poverty Line (FPL) | Income threshold based on family size and state | USD ($) | Varies annually |
| Payment Percentage | Portion of discretionary income used for payment | Percent (%) | 5% – 10% |
| Loan Balance | Total amount of outstanding student debt | USD ($) | $1,000 – $250,000+ |
Practical Examples
Example 1: Single Borrower with Undergraduate Loans
Let’s consider a recent graduate working as a teacher.
- Inputs: AGI of $40,000, Family Size of 1, residing in Texas (Contiguous US), with a $35,000 undergraduate loan balance at 5% interest.
- Calculation:
- 2024 FPL for 1 person: $15,060
- 225% of FPL: $33,885
- Discretionary Income: $40,000 – $33,885 = $6,115
- Annual Payment (at 5% for undergrad loans): $6,115 * 0.05 = $305.75
- Result: The estimated monthly payment would be approximately $25.48. This is significantly lower than a standard 10-year plan payment. Understanding this can be a key part of pursuing student loan forgiveness options.
Example 2: Married Couple with Mixed Loans
Imagine a physical therapist and their partner who file taxes jointly.
- Inputs: Combined AGI of $110,000, Family Size of 3, residing in California, with $20,000 in undergraduate loans and $80,000 in graduate loans at 6% interest.
- Calculation:
- 2024 FPL for 3 people: $25,820
- 225% of FPL: $58,095
- Discretionary Income: $110,000 – $58,095 = $51,905
- Weighted Payment Percentage: (($20k/$100k) * 5%) + (($80k/$100k) * 10%) = 1% + 8% = 9%
- Annual Payment: $51,905 * 0.09 = $4,671.45
- Result: The estimated monthly payment would be approximately $389.29. They can also use a loan amortization calculator to see their long-term payment schedule.
How to Use This SAVE Repayment Plan Calculator
- Enter Your AGI: Input your Adjusted Gross Income from your latest federal tax return.
- Set Family Size: Count yourself, your spouse (if applicable), and any dependents.
- Choose Filing Status: Select how you file taxes. This is crucial if you are married, as filing separately can exclude your spouse’s income from the calculation.
- Select State: Choose your state of residence, as poverty guidelines differ for Alaska and Hawaii.
- Input Loan Balances: Enter your total federal undergraduate and graduate loan amounts separately to get the most accurate payment percentage.
- Provide Interest Rate: Enter the weighted average interest rate of your loans.
- Calculate: Click the “Calculate Payment” button to see your results, including your monthly payment, interest subsidy, and a sample amortization schedule. Understanding interest capitalization is less of a concern on SAVE, as the subsidy prevents balance growth.
Key Factors That Affect Your SAVE Payment
- Adjusted Gross Income (AGI): This is the most significant factor. A lower AGI leads to a lower monthly payment.
- Family Size: A larger family size increases the poverty line threshold, which protects more of your income and lowers your payment.
- Loan Type (Undergraduate vs. Graduate): The payment percentage is lower for undergraduate loans (5%) than for graduate loans (10%), directly impacting the final payment amount.
- Marital Filing Status: For married borrowers, filing separately allows you to use only your income for the calculation, which can be highly beneficial if your spouse earns a high income.
- Federal Poverty Level: These guidelines change annually, so your payment may be recalculated each year upon income recertification.
- Original Loan Balance: While it doesn’t affect the monthly payment amount, the initial amount you borrowed determines your path to federal student aid forgiveness, with lower balances being forgiven sooner (as early as 10 years).
Frequently Asked Questions (FAQ)
- What if my income is below 225% of the poverty line?
- Your monthly payment will be $0. You will still get credit towards loan forgiveness during this time.
- Does the unpaid interest still grow on the SAVE plan?
- No. One of the biggest benefits of the SAVE plan is that if your calculated payment is less than the monthly accrued interest, the remaining interest is waived. Your loan balance will not increase as long as you make your required payments.
- Are Parent PLUS loans eligible for the SAVE plan?
- No, Parent PLUS loans are not directly eligible. However, they may become eligible if consolidated into a Direct Consolidation Loan, though this can affect which IDR plans are available.
- How do I apply for the SAVE plan?
- You can apply directly through the Federal Student Aid website (StudentAid.gov). If you were previously on the REPAYE plan, you were automatically moved to SAVE.
- What happens if my income increases significantly?
- Your payment will increase upon your annual income recertification. Unlike some other IDR plans, there is no cap on how high your payment can go on SAVE; it will always be based on the discretionary income formula.
- How does “Married Filing Separately” work?
- When you file separately, the SAVE plan calculation will only consider your individual AGI and your family size will typically not include your spouse. This is a powerful strategy to lower payments if your spouse has a high income.
- Is the forgiven loan amount taxable?
- Currently, federal law exempts student loan amounts forgiven through IDR plans from federal income tax through 2025. State tax laws may vary.
- Where can I find more tools?
- You can find other useful tools to compare repayment plans and manage your student debt across our site.
Related Tools and Internal Resources
Explore these resources to further manage your student loan journey:
- Guide to Income-Driven Repayment Plans: A comprehensive overview of all available IDR options.
- Student Loan Forgiveness Options: Learn about PSLF and other ways to have your debt forgiven.
- Loan Amortization Calculator: See how your payments break down over the life of the loan.
- Understanding Interest Capitalization: A deep dive into how interest can increase your loan balance.
- Federal Student Aid Programs: Discover other federal programs that can help you pay for education.
- Compare All Repayment Plans: A tool to see SAVE, PAYE, IBR, and Standard plans side-by-side.