Money Mastery Coaching

Student Loan Forgiveness Update: The Latest Info on SAVE

Hey, everyone! Wade Reed here, the founder of Money Mastery Coaching. I’ve got some exciting news for you—major student loan forgiveness updates as of August 2023. The Revised REPAYE program is being eliminated and making way for a new game-changer: the SAVE Plan. Stick around as I break down the key highlights that can positively impact your financial journey.

Saving on a Valuable Education (SAVE) Plan: A Quick Overview

First, the SAVE Plan, which stands for Saving on a Valuable Education, is an income-driven repayment (IDR) plan introduced by the Biden administration in August 2023. Let’s delve into the essential features that make this plan a game-changer for you.

1. No Capitalization of Unpaid Interest: A Huge Win!

One of the standout features of the SAVE Plan is the absence of interest capitalization on unpaid interest. Unlike its predecessor, the Revised Pay As You Earn (REPAYE) plan, this prevents the loan interest from compounding and becoming a financial burden. Imagine not having to worry about your loan balance growing beyond what you originally owed. It’s a huge relief!

2. Reduced Monthly Payments: A New Formula for Affordability

The discretionary income formula, now a crucial factor in determining monthly payments, has undergone a positive change. Instead of 175% of the poverty level, the qualifying factor is now 225%. This shift results in likely reduced monthly payments for you, making it more manageable to navigate your finances.

3. Loan Forgiveness: Changes in Timeframes

The SAVE Plan brings noteworthy changes to loan forgiveness. For undergraduate and graduate programs, it remains at 20 years and 25 years, respectively. The real game-changer? Borrowers with a balance less than $12,000 can qualify for loan forgiveness after just 10 years. This can be a significant relief for those facing financial challenges.

4. Supporting Those in Need: The Essence of Loan Forgiveness

Although student loan forgiveness is a bit of a controversial topic, the aim is to support individuals facing challenges repaying their student loans. Some people consistently make their payments, but struggle to fully pay off their loans due to various life circumstances. For them, this student loan forgiveness update will allow them to achieve their financial freedom after a considerable period; a positive for society. It’s a recognition that everyone’s financial journey is unique, and sometimes, a helping hand is needed.

To wrap it up, the SAVE Plan is in full swing, and if you were on the (REPAYE) plan, you’ve likely transitioned automatically. Take a moment to verify and ensure the new plan is effective for you. If not, reach out to your student loan servicer to get set up.

Best of luck on your financial journey! I’ll be supporting you with more valuable content soon. Let me know if this information on the student loan forgiveness update was helpful, and stay tuned for more insights.

Scroll to Top
Skip to content