Student Loan Borrowers Now Have a New Plan to Cut Their Monthly Payments

The Biden administration on Tuesday launched a new income-driven repayment plan to reduce monthly student loan payments for millions of eligible federal loan borrowers.

The Education Department has said that interest resumes on Sept. 1, and first payments are due in October. Those who enroll in SAVE in the coming days will see their new, adjusted payments reflected in their first billing statement, senior administration officials have said. Take a new graduate making $55,000 a year, the average starting salary for someone with a bachelor’s degree. Under the prior REPAYE program, that person would owe $276.08 a month, according to calculations done for Barron’s by student loan expert Mark Kantrowitz. Under SAVE, the borrower would owe $184.96 until next summer, when the monthly payment will be halved to $92.48.

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