It marks a significant change to the federal student loan system that could lower monthly loan payments for some borrowers and reduce the amount they pay back over the lifetime of their loans.
Borrowers will only need to apply one time, not yearly as past systems require, which officials said would make this plan "much easier to use." Users will receive a confirmation email once the application is submitted, and the approval process, which can be tracked online, is expected to take a few weeks.
The SAVE plan, which applies to current and future federal student loan borrowers, will determine payments based on income and family size, and some monthly payments will be as small as $0. The income threshold to qualify for $0 payments has been increased from 150% to 225% of federal poverty guidelines, which translates to an annual income of $32,805 for a single borrower or $67,500 for a family of four.
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