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  • Writer's pictureAlex Kreis

How Does The New Student Loan Repayment Plan Differ From Other IDR Options?

If you find navigating your student loans daunting and overwhelming, there’s a new plan that might just be what you’ve been waiting for. 

The Education Department made a new repayment plan for student loans, called the Saving on A Valuable Education (SAVE) plan to help make paying back student loans easier. It's different from the older plans. 

For resident doctors, it means they might have to pay less each month, and if they owe less than $12,000, they could get rid of their remaining debt in just 10 years instead of waiting for 20 or 25 years like before. This new plan makes managing their student debt much better for the students.

Let's see how much it differs from your previous IDR choices:

1. It has simplified repayment choices for students

The SAVE plan marks a departure from the array of choices that previously confronted borrowers. The complexity of navigating multiple IDR plans has been streamlined. By phasing out older plans and consolidating options, borrowers now face a more straightforward decision-making process.

2. It helps enhance income sheltering

One of the pivotal changes lies in the calculation of discretionary income. The SAVE plan sets a new threshold for discretionary income at 225% of the federal poverty guideline, significantly reducing the portion of income subject to repayment calculations. This alteration offers substantial relief to borrowers, especially those from modest income backgrounds.

3. It has reduced payment obligations

The most tangible relief comes through reduced repayment obligations under the SAVE repayment plan. Specifically for undergraduate borrowers, there's a significant cut, with payments fixed at 5% of discretionary income, slashing the previous requirement in half. This dramatic decrease in monthly payments could greatly ease financial strain for numerous borrowers.

4. It helps in accelerating loan forgiveness

The timeline for loan forgiveness has been expedited, particularly for those with smaller balances. Borrowers with principal loan balances of $12,000 or less stand to have their remaining balances forgiven after a mere decade of consistent payments. This shift represents a remarkable departure from the previous 20 to 25 years required for forgiveness.

5. It eliminates unpaid interest accumulation

Unlike the past where unpaid interest continued to accumulate, the SAVE plan ensures that any remaining interest beyond the monthly payment is covered by the government. This crucial change prevents interest from snowballing, offering borrowers a more manageable pathway to debt freedom.

What’s the timeline and eligibility?

The rollout of the SAVE plan commenced partially in October 2023, with additional benefits set to take effect by July 2024. Borrowers with federal student loans can sign up through or via their loan servicer, experiencing a streamlined application process that promises quicker access to relief.

Beyond the SAVE plan: future enhancements

The Education Department is committed to further streamlining the new IDR plan process. Plans to integrate with the IRS system, automatic recertification, and redesigning the IDR application aim to simplify and expedite loan repayment procedures for borrowers.


Overall, the SAVE plan offers a simplified repayment structure and enhanced benefits for physicians by making their loan management easier and more favorable. It provides clear guidelines and improved terms, reducing stress and offering better flexibility, especially for resident doctors. This plan marks a positive shift towards fairer and more manageable student loan payments for healthcare professionals.

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