SAVE Repayment Plan FAQ
Below are some basic questions and answers about the new Saving on a Valuable Education (SAVE) income-driven repayment plan and how the new plan interacts with the Law School's Loan Repayment Assistance Program (LRAP).
Is SAVE an eligible repayment plan for LRAP?
Yes, SAVE is an eligible income-driven repayment (IDR) plan for LRAP due to it being a replacement of the REPAYE plan.
Which repayment plans are LRAP eligible?
IBR, PAYE, and SAVE are LRAP-eligible IDR plans. ICR is not an eligible plan for LRAP.
Which loans are eligible for the SAVE plan?
Eligible loans for the SAVE Plan include:
- Direct Subsidized Loans,
- Direct Unsubsidized Loans,
- Direct PLUS Loans made to graduate or professional students, and
- Direct Consolidation Loans that did not repay any PLUS loans made to parents
Some other federal student loans can be consolidated into a Direct Consolidation Loan and become eligible for SAVE.
Eligible loans for the SAVE Plan may not match the loans that are eligible for LRAP. All federal loans processed by UChicago and used to cover the UChicago Law School's cost of attendance are eligible for LRAP. Transfer students may receive assistance only for loans acquired at the University of Chicago Law School.
Will my monthly payment change under SAVE?
Your monthly payment is based on your discretionary income - the difference between your adjusted gross income (AGI) and a percentage of the U.S. Department of Health and Human Services Poverty Guidelines. The formula for IBR, PAYE, and REPAYE account for a 150% exemption. Under SAVE, the exemption will increase to 225%.
What if my monthly payment under SAVE does not cover my interest?
The SAVE plan eliminates 100% of remaining interest for the above eligible federal student loans after a scheduled payment is made, if the payment is not enough to cover accrued interest. This benefit is only available for the SAVE plan.
Will my spousal income be included in the SAVE repayment calculation?
If you are married and filing separately then your spousal income will not be included in your monthly payment calculation. If you file jointly, then their income will be included.
Are there any other changes being made to IDR plans?
Yes, the Department of Education launched additional changes to the IDR application and process this summer, including automatic tax disclosure in the IDR application, automatic annual re-enrollment in IDR, an end to interest capitalization when a borrower leaves most IDR plans, and a redesigned IDR application that now includes SAVE. More information about these changes is available at studentaid.gov.
With regards to the end to interest capitalization, per studentaid.gov: as of July 1, 2023, unpaid interest on federal student loans won’t be added to principal balances when a borrower leaves any IDR plan, except the Income-Based Repayment (IBR) Plan (where capitalization is required by statute). This is an important distinction to keep in mind if you think you may switch repayment plans while pursuing LRAP.
We are awaiting confirmation from the Department of Education if this applies to both Unsubsidized Loans and Graduate PLUS Loans. We'll update this website as we learn more.
Does the Law School recommend a repayment plan?
The Law School does not make a recommendation of which plan is best since each alum’s situation is different. We encourage students to use the Federal Student Aid Loan Simulator as well as Access Lex’s Student Loan Calculator to do comparisons of the repayment options.
I am currently in Revised Pay As You Earn (REPAYE). How do I switch to SAVE?
If you are currently in (or have most recently been in) REPAYE, you do not need to switch to SAVE. SAVE will be replacing REPAYE as a repayment plan. Borrowers who are enrolled in the REPAYE plan will automatically be enrolled in SAVE.
How can I apply for the SAVE plan?
You can apply for an Income-Driven Repayment plan through studentaid.gov.
Where can I find additional information about SAVE?
Additional information about the SAVE plan can be found on studentaid.gov.