Nowadays it is important for students in the USA to get a college degree, but the university fees ($20,000-$50,000 annually), books ($1,000+) and living expenses add up to a huge burden. That is why 70% of students take federal loans. It is easy to take a loan, but it is difficult to pay back.
The solution to this is SAVE Plan (Saving on a Valuable Education) – which is the cheapest way to pay off your debt using your income.
What is SAVE Plan?
This is the U.S. government’s Income-Driven Repayment (IDR) program:
- Payment according to your monthly income and family size
- If income is less, then installment can be as low as $0/month
- If your payment is less than monthly interest, government will give the remaining loan itself (interest subsidy)
- After 20-25 years, the remaining debt is completely waived
5 Big Benefits of SAVE Plan:
- $0 Installments – If your income is less than $32,800 per year
- Interest Free – Government will cover extra interest
- Loan Forgiveness – Debt is waived in 20 years after regular payments
- Emergency Relief – Payments can become temporarily $0 on job loss
- Chance of Marriage/Children – Payments decrease further on increase in household size
Who can apply?
All federal loan holders are eligible:
- Direct Subsidized/Unsubsidized Loans
- Direct PLUS Loans (for graduate students)
- Direct Consolidation Loans
Private loans (like Sallie Mae) are not included in this plan.
How to Apply (3 Steps):
- Create an ID
Create your FSA ID on studentaid.gov - Fill the Form
Enter your details in “Income-Driven Repayment Plan Request” - Select SAVE
Select “SAVE Plan” from the options
If you haven’t filed your taxes, upload your payslips or unemployment proof.
Tips for USA Students:
- Payment Estimate: Calculate your installment on Loan Simulator
- AutoPay: Turn on autopay to reduce interest by 0.25%
- Annual Update: Update details every year when income increases
– Deferment: Ask for “Economic Hardship Deferment” if you don’t get a job
Example (US Context):
Ali‘s loan: $40,000
Monthly income: $2,500 (part-time)
Normal plan: $400/month
SAVE Plan: $90/month
This way Ali can focus on his studies!
Conclusion:
SAVE Plan is not just a way to pay off debt, it is a way to make education cheaper. If you:
- are in an entry-level job
- are doing residency/internship
- family expenses are high
…then apply today!
“Pay off debt and dignity, make life easy!”