What is the SAVE plan?

The SAVE plan is the flagship income-based repayment plan offered by the U.S. Department of Education. It was announced in August of 2023 and phases in gradually through July 2024. Borrowers can sign up now. For more details see: The Department of Education website

What is the Standard plan?

The standard plan is the default plan borrowers are automatically enrolled in. Generally speaking you pay a fixed monthly payment such that your loans will be fully paid off in 10 years. For more details see: The Department of Education website

Why does this site only compare those two plans? Aren’t there others?

In the spirit of the 80/20 rule we chose the two most relevant plans to compare. We plan to incorporate more plans as time goes on to comprehensively round out the solution, but we will do it in a way that clarifies rather than confuses.

Who is eligible for the SAVE plan?

Most student loan borrowers are eligible. There are no income limits. This resource shows you the eligibility under the heading "Which Loans are Eligible".

What is the ‘Tax Bomb’?

There is law on the books that forgiven student loan debt is considered taxable income1. That means if you’re a borrower with $100K of loans, and you choose the SAVE plan and make 25 years of the required payments, you will subsequently be liable for paying up to an additional $37K2 to the IRS. Pandemic-era regulation temporarily paused this statute, but it goes back into effect starting in 2026.

How do I find & calculate my average interest rate?

You can find the interest rate for each loan you’re paying on your servicer website under an option to view your loans. To calculate the average simply calculate the weighted average. Here is a resource that includes a calculator and detailed instructions.

If you don’t want to bother signing in to your servicer, finding those details, and doing the calculation then you can always estimate for the time being. Student loans are usually in the range of 4-8%, so you can test a few numbers in that range to get a sense.

What should I put for my family size?

The central question here is: do you file taxes jointly with your spouse? If you do, then include their income in the income calculation, and include your spouse in the family size along with your dependents.

In all other cases, only use your income, and only include yourself and your dependents in family size

1Unless it is part of the Public Service Loan Forgiveness Program

2Actual amount due will vary depending on your tax bracket and how much of the loan was forgiven