Real-World Examples of the Benefits of SAVE

Obtaining a college degree is a well-established route to the middle-class. In August 2023, the Biden-Harris Administration introduced the Saving on a Valuable Education (SAVE) plan to ensure that the burden of student loans does not hinder opportunities afforded by a post-secondary education, particularly for those who come from less-advantaged backgrounds who need to finance their studies with debt. This voluntary, income-driven repayment (IDR) plan adjusts monthly payments based on the borrower’s income, with potential for zero-dollar payments when incomes are low. Compared to previous IDR plans, SAVE protects more income from loan payment calculations, bases payments on a smaller fraction of the unprotected income for undergraduate debt, and to prevent balances from growing, does not carry forward unpaid monthly interest.

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