New SAVE Student Loan Payment plan EXPLAINED

A new student loan payment plan is rolling out this summer - the SAVE student loan payment plan is replacing REPAYE as one of the income driven repayment plans and it's a great way to ...well...save money on your student loan payments. In this video I give you all the big highlights of this new way to pay off your student loans (spoiler alert: student loan forgiveness after 20 or 25 years!)
- What is the SAVE plan? - including what's rolling out this summer and what you'll have to wait for next summer
- SAVE plan and PSLF
-How to enroll in the new SAVE plan

Enjoy!

Links mentioned:

🎁 DOWNLOAD MY STUDENT LOAN CHEAT SHEET THAT GOES OVER 13 DIFFERENT FEDERAL STUDENT LOAN FORGIVENESS PROGRAMS 🎁

🎁 Get the 1-MINUTE MONEY MOVES checklist that will help you *save more, stress less, and get control 🎁

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Ms. Moody - former librarian, current financial feminist, and money educator.

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Thanks for watching!

Heads up: All the content is for educational purposes only. Ms. Moody is not a licensed financial advisor; she’s a librarian, money nerd, and educator. As personal finance is personal, to find out what is best for you, consult a financial professional. Users are solely responsible for any actions they take.

This video is protected under US Copyright law. If you would like to reuse any of it for your own work, you must have explicit permission from the creator (Ms. Moody). Please contact me for permission before using any part of the video.

Chapters:

00:00 - 00:33 Intro
00:34 - 3:39 SAVE student loan plan 2023
3:40 - 5:06 SAVE student loan plan 2024
5:07 - 5:30 SAVE plan and PSLF
5:31 - 6:01 SAVE plan requirements
6:02 - 7:08 How to apply to the SAVE plan

[marginator]

I'm on the PAYE plan currently with about 5 years of qualifying payments so far (undergrad and grad loans). We did some quick math and realized id end up paying about $8k MORE by switching to the SAVE plan than by staying on PAYE. Im sure this is not the norm for everyone but definitely a good reason to review your options for the long term!

[wendyperez]

I stumbled upon your channel today, because apparently I’ve been living under a rock and didn’t realize student loan payments are now due again, and had to rush to do some research… I’m SO grateful to have found your channnel!!! I am working towards PSLF, and took your advice to consider the SAVE plan and essentially lowered my monthly payment from $1, 240 to $92… 😳🤯🤯🤯 My SAVE plan application is still pending, but if these numbers prove to be true, your videos will have changed my life in a HUGE way! Thank you so much for doing the lords work by simplifying such a complicated process!!! I will definitely keep you posted!!!!

[theresabell]

Thank u I just applied and was surprised my payments are under a $100. ❤❤❤

[DBoyTommie]

This is pretty much a life-changing development for me. Great video

[derrickcleveland]

Thank you for all the great into, just started watching!
I had 101K in student loans (grad and undergrad over 7 years) and thankfully consolidated them at 1.9% in 2005. I did consolidate again 18 months ago to a Direct Loan (from FFELP from Navient) just in case forgiveness went through.
With my grad loans I know I won’t be eligible anyway for any forgiveness for 6 more years, but I’m thankful they should be finally paid off in a few years.🙏🏻

[bivianacoyomani]

thanks to the covid - 19 student loans on pause I've paid off 33k (including interest). from 51K and now I owe 21K. Happy!

[alandeasis]

Thank you for your responses! I just have one more question, regarding interest not accruing anymore, this is huge! Can you better explain this? I for example have a Principle of $300, 000.00. Every month I accrue about $1000.00 interest. I've been making a 3k payment every month, so that $1000 covers the interest and the remaining $2000 goes to the Principle. This has been killing me because so much goes to the Interest to make sure it stays at zero and my overall balance doesn't balloon out of control. But now with SAVE this is all different???

Let's say under SAVE my calculated monthly payment is $500 and that's all I pay each month, nothing more. What's happening to the $1000 interest I'm generating every month? And all of the $500 payment goes to the Principle? Please feel free to use your own example if that makes things easier for other viewers to follow. Thank you!

[melm]

How to figure out payments for someone that has 4 IBR loans and 4 SAVE loans all undergraduate loans.

[AJ-dixd]

I switched to SAVE today. The final agreement page said that the entire current amount of my student loan amount would be forgiven after 20 years and I would have to pay income tax on the entire amount. How in the world is that possibly going to work??? Today I was on hold for 2.5 to discuss this with my loan servicer but of course they were completely clueless.

[LavaStormPlays]

So, the 10 years of payments is only for payments under the save plan, and the 10 years of payments from before the save plan do not count to be forgiven? That sucks, was hoping us who have been 100% on our payments would also fall under the save plan with those years counted towards the forgiveness 10 year mark.

[gregbocadella]

Thank you for this video! The end of this student loan pause has left me quite nervous and confused and the info you provided here has helped alleviate some of those worries. If I recall correctly, the DOE is still working on an alternate way to provide relief to most borrowers as well.

The SAVE plan currently sounds perfect for me but the only remaining concern I have is what would happen if I enrolled in it but eventually secured a job with a better salary. If the SAVE plan is contingent on a percentage of discretionary income, I wouldn’t want to be stuck making payments higher than they would be if I had chosen a standard repayment plan. I wonder if it would be possible to switch plans later on or opt out of SAVE in a few years time if that scenario were to ever play out.

[ariah]

Mine says since one of more of my loan servicers don’t participate in the online IDR application process, I must do a few more things. How can I ensure i accurately do this?

[neilfleisher]

My daughter graduates in August as a Physician Assistant. Will have both undergrad and grad fed loans. Best way for her to start in order to get on Save Plan on her way to PSLF. Thank You

[captainkangaroo]

Do you know if there are plans to extend the federal income tax moratorium on forgiven loans beyond 2025. As it stands if your loans are forgiven in 2026 you could owe thousands in federal income tax but if the loans were forgiven in 2025 the federal tax burden would be zero. Hardly seems equitable.

[st]

I'm on the save plan. Currently my payment is $60, which all goes to interest, so my balance never goes down.

Do you have any information on making extra payments toward the principal without having to pay additional interest? (I could do that before on repaye, but would have to send a check with a letter requesting to apply it to principal and not toward future payments, such a hassle).

[shellyottomanscentsyleadco]

Is this for federal student loans only? I have Sallie Mae and they won't work with me at all.

[LeighHickham]

I am currently finishing my last year of medical school. I have both direct unsubsidized and grad plus loans. In order for the interest subsidy under SAVE to be in effect do I have to be graduated/out of school and in repayment?

[Jmay]

For some reason your website would not let me download the cheat sheet. When I put the verification code in, it kept saying it was wrong.

[blakemccabe]

Does this still work with the public service loan forgiveness program?

[JohnnyDeaux]

if we were to get off of the IDR would that interest that "didnt accrue" come back? also could i pay above the $0 payment if i wanted to ? and put it towards the principal of a specific loan?