Student Loans SAVE Plan Calculator
Estimate your monthly payments under the Saving on a Valuable Education (SAVE) plan.
Enter your annual AGI from your most recent tax return. This is your gross income minus certain deductions.
The number of people in your household, including yourself.
Total amount of your undergraduate federal student loans.
Total amount of your graduate federal student loans.
The weighted average interest rate across all your federal loans.
What is the Student Loans SAVE Plan Calculator?
The Student Loans SAVE Plan Calculator is a financial tool designed to estimate your monthly student loan payments under the federal government’s Saving on a Valuable Education (SAVE) plan. This income-driven repayment (IDR) plan replaced the previous REPAYE plan and often results in the lowest monthly payment for most federal student loan borrowers. Our calculator helps you understand how your income, family size, and loan types (undergraduate vs. graduate) contribute to your final payment amount, providing clarity and helping you budget effectively.
This tool is for anyone with federal student loans who wants to see if the SAVE plan is a good option for them. It is especially beneficial for low-to-middle income earners, as the plan’s structure protects more of your income from being counted in the payment calculation.
The SAVE Plan Formula and Explanation
The SAVE plan’s calculation is based on your “discretionary income.” It’s calculated by taking your Adjusted Gross Income (AGI) and subtracting 225% of the Federal Poverty Level (FPL) for your family size. Your monthly payment is then a percentage of that discretionary income, based on your loan types.
The formula is: Monthly Payment = (AGI – (2.25 × FPL)) × Payment Rate / 12
The Payment Rate is a weighted average: 5% for undergraduate loans and 10% for graduate loans. If you only have undergraduate loans, your rate is 5%. If you only have graduate loans, it’s 10%. If you have both, the rate is weighted based on your original principal balances. A major benefit of this plan is that if your payment doesn’t cover the monthly interest, the remaining interest is waived, preventing your loan balance from growing. For more information, check out these student loan guides.
| Variable | Meaning | Unit | Typical Range |
|---|---|---|---|
| AGI | Adjusted Gross Income | USD ($) | $20,000 – $150,000+ |
| Family Size | Number of people in household | Count | 1 – 6+ |
| Loan Balance | Total principal and interest owed | USD ($) | $5,000 – $200,000+ |
| Payment Rate | Percentage of discretionary income | Percent (%) | 5% – 10% |
Practical Examples
Example 1: Recent Graduate with Undergraduate Loans
A single recent graduate is working their first job.
- Inputs: AGI = $45,000, Family Size = 1, Undergrad Loan = $35,000, Grad Loan = $0, Interest Rate = 5%
- Calculation: Discretionary income is $45,000 – (2.25 × $15,060) = $11,115. The payment rate is 5% for undergrad loans.
- Results: The annual payment is $11,115 × 0.05 = $555.75. The estimated monthly payment is $46.31.
Example 2: Family with Graduate and Undergraduate Loans
A borrower with a family of four and loans from both undergrad and grad school.
- Inputs: AGI = $90,000, Family Size = 4, Undergrad Loan = $20,000, Grad Loan = $50,000, Interest Rate = 6.5%
- Calculation: FPL for a family of 4 is $31,200. Discretionary income is $90,000 – (2.25 × $31,200) = $19,800. The total loan is $70,000. The weighted payment rate is (($20k/$70k) × 5%) + (($50k/$70k) × 10%) = 1.43% + 7.14% = 8.57%.
- Results: The annual payment is $19,800 × 0.0857 = $1696.86. The estimated monthly payment is $141.41. This might be a significant saving compared to other plans. You may want to compare it with other income-driven repayment options.
How to Use This Student Loans SAVE Plan Calculator
Follow these simple steps to estimate your payment:
- Enter Your AGI: Input your Adjusted Gross Income. You can find this on line 11 of your Form 1040 tax return.
- Set Your Family Size: Enter the number of individuals in your household that you support financially.
- Input Loan Balances: Enter the total balance for your undergraduate loans and graduate loans separately. If you only have one type, enter 0 for the other.
- Add Interest Rate: Provide the average interest rate for all your loans. If you’re unsure, 5-7% is a reasonable estimate.
- Review Your Results: The calculator will instantly show your estimated monthly payment, along with key values like your discretionary income and effective payment rate. This can help you understand your options for loan consolidation strategies.
Key Factors That Affect Your SAVE Plan Payment
- Adjusted Gross Income (AGI): This is the most significant factor. A higher AGI leads to a higher payment, while a lower AGI reduces it.
- Family Size: A larger family size increases the poverty level threshold, which protects more of your income and lowers your payment.
- Federal Poverty Level (FPL): The FPL guidelines change annually. An increase in the FPL will lower payments for everyone on the plan, assuming income is constant.
- Loan Type Mix: The percentage of your discretionary income used for payments (5% for undergrad, 10% for grad) is determined by your loan portfolio. A higher proportion of undergraduate debt results in a lower payment.
- Marital Status and Tax Filing: If you are married and file taxes jointly, your spouse’s income is included in the AGI. Filing separately can sometimes result in a lower payment, a factor to discuss with a tax professional.
- Loan Forgiveness: The SAVE plan offers loan forgiveness after 10-25 years of payments, depending on your original loan balance and loan type. This is a crucial long-term benefit. Exploring options like Public Service Loan Forgiveness (PSLF) is also recommended if you work in public service.
Frequently Asked Questions (FAQ)
What is discretionary income on the SAVE plan?
It is the difference between your Adjusted Gross Income (AGI) and 225% of the Federal Poverty Level for your family size. It’s the amount of your income used to calculate your monthly payment.
What if my calculated payment is $0?
If your discretionary income is zero or negative, your monthly payment under the SAVE plan will be $0. This is a key benefit for low-income borrowers. Even with a $0 payment, you remain in good standing and make progress toward loan forgiveness.
What is the SAVE plan interest subsidy?
If your monthly payment under the SAVE plan doesn’t cover all the interest that accrues that month, the government waives the remaining unpaid interest. This prevents your loan balance from increasing over time (negative amortization).
Is the SAVE plan the same as the old REPAYE plan?
No. SAVE is the replacement for REPAYE. It’s more generous, protecting more income (225% of FPL vs. 150%) and having a lower payment percentage for undergraduate loans (5% vs. 10%).
Can I use this student loans save plan calculator if I’m married?
Yes. If you file taxes jointly, use your combined AGI. If you file separately, you generally only need to use your own AGI. Using the calculator can help you see which filing status might be more beneficial for your loan payments.
Does my loan balance affect the monthly payment amount?
Directly, no. Your monthly payment is based on your income and family size. However, the balance is crucial for determining your weighted payment percentage (if you have both grad and undergrad loans) and for calculating your path to total student loan forgiveness.
When does the 5% payment rate for undergraduate loans start?
The reduction of payments on undergraduate loans to 5% of discretionary income is fully effective as of July 2024. Our student loans save plan calculator already incorporates this rule.
Are private student loans eligible for the SAVE plan?
No. The SAVE plan, like all federal income-driven repayment plans, is only available for federal student loans (e.g., Direct Loans). Private loans have their own repayment terms set by the lender.
Related Tools and Internal Resources
Explore more of our tools and resources to manage your finances:
- Income-Driven Repayment Options: Compare the SAVE plan with other IDR plans like PAYE and IBR.
- Public Service Loan Forgiveness (PSLF) Calculator: See if you qualify for loan forgiveness through public service work.
- Student Loan Forgiveness Options: Learn about all the different pathways to student loan forgiveness.
- Loan Consolidation Strategies: Find out if consolidating your federal loans is the right move for you.
- Student Loan Guides: Deepen your understanding of student loan management with our comprehensive guides.
- Budgeting and Debt Management: Tools and tips for managing your overall financial health.