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As student loan repayments resume, new SAVE plan may be more manageable for some borrowers

A screenshot of the website. In large white letters is written "Get Ready for Student Loan Payments"
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For more information on federal loan repayment plans, visit or contact your loan servicer.

Federal student loan repayments resume in October, and for borrowers, the type of repayment plan they choose determines how much they pay each month, the duration of the payments and whether they qualify for loan forgiveness programs. New changes were implemented by President Joe Biden this year to make the decision easier.

All borrowers are automatically enrolled in the standard repayment plan, which means they will make fixed payments for 10 years. Some plans such as the standard plan aren’t good options if a borrower wants to qualify for student loan forgiveness programs. However, eligible borrowers can opt in to other graduated, extended or income-driven repayment plans.

People can use the loan simulator on to get an estimate of their monthly payments with various plans.

READ MORE: Federal student loan payments to resume next week after more than three year pause

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The Biden administration announced changes to the SAVE plan, formerly the REPAYE plan, earlier this year. The plan caps monthly payments at 5 percent of a borrower’s discretionary income and forgives outstanding undergraduate loan balances after 20 years. People making less than about $15 an hour will have a $0 monthly payment.

Phil Schuman, Indiana University director of financial literacy, said many people are excited about the SAVE plan because it has some of the most favorable terms of any of the income-based repayment plans.

“Look to see if you qualify for the SAVE plan,” he said. “Apply for it. Hopefully it comes through and you get approved for it. But if not, that's when you start having the conversation with your servicer and figure out, OK, what's the next best option for me?

For more information on federal loan repayment plans, visit or contact your loan servicer.

Kirsten is our education reporter. Contact her at or follow her on Twitter at @kirsten_adair. Contact WFIU/WTIU's Aubrey Wright on Twitter at @aubreymwright or email her at

Kirsten the Indiana Public Broadcasting education reporter. Contact her at or follow her on Twitter at @kirsten_adair.