Borrowers can now apply for new, income-based student loan repayment

The program will calculate monthly payments based on the borrower's income and family size. The administration estimates that under SAVE more than a million borrowers will qualify for $0 monthly payments, while the average borrower will save about $1,000 a year. The new plan also seeks to prevent interest from exploding.

Under the SAVE plan, as long as borrowers make their monthly payments, interest will not accumulate. With previous plans, borrowers with low or $0 payments — too low to cover their monthly interest charge — saw that interest accrue. Now, the government says, that won't happen. In a January review of the SAVE plan, Delisle and his colleagues found that, for bachelor's degree recipients,"the share fully paying off their loans would fall from 59 percent under current [income-driven repayment] to 22 percent."Borrowers with federally held loans including direct subsidized, unsubsidized and consolidated loans qualify for SAVE.

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