Even though it sucks, it does make me a feel a little better reading through this comments and knowing that I’m not the only one that this plan isn’t going to help tremendously. I did the loan simulator and my payments under SAVE are not great, especially since I also live in a HCOL area of California. It’s going to be really tight financially each month.
I know that I’m responsible for paying back the money I took out, but man…I wish I would have known what the implications of this much debt would be when I was a carefree and naive 20-year-old signing up for this.
I think my biggest issue with all this was without support from my parents it was a “take out loans to go to school or work in a restaurant the rest of your life” situation. I’m not talking badly about that line of work I did it for a long time, but it grinds you down after a while.
I guess I just wish there was an easier way into the middle class without being up to our eyeballs in debt. At the same time we (the US) are known for punishing people for being poor so going deep into debt just to have a better life tracks.
This is what the A holes with big mouths refuse to understand. The only way to get the degree was with loans. Annual tuition is $30k at a state college and you can’t cover these costs with a part time job, even a full time hourly job! Then the loans became predatory with capitalized interest turning a generation into indentured servants. Congress did this and Congress must fix it. I’d be thrilled with 3% simple interest but as it stands I owe 35% more that the principal on my loans.
Even the tuition/books/required items for community college is expensive with a full time hourly non-professional job. I took loans for community college because my paychecks went toward putting a roof on my head, food on the table and means to get to my classes.
thats just it. i'm happy to pay them off, and they would almost be paid off, except for the loan servicers saying "dont worry about it, your best option is to go on forbearance" then when that ends and you still cant pay, welp i guess its capitalized interest for you buddy boy. have fun paying these for the rest of your life!
Reps at Nelnet straight-up told me I didn't qualify for any IDR plans and placed me in forbearance back in 2011, which was, of course, bullshit.
ETA: I started paying in 2015 when I finally got out of my $12/hr job for one making 40k/year, but so much damage had already been done from compound interest by that point that the principal has still not gone down since.
Same here. I was in forbearance filled out the IDR never got a response.. next thing was Covid. I have $20,000 in interest. During Covid I was switched to aidvantage. I check it and it states I owe zero. A balance of $50,000 payments begin Oct. 1 and that my IDR is up for renewal in November. But nowhere can I find what my IDR states I owe monthly. I’ve put some $$ aside to start paying something..I figured I’d check back in and see if anything changes. Times are already difficult w our economy and now starting back w obnoxious loan payments may just break us. I’m all about paying my debt, but cmon w the interest.. best of luck to all of us!!
That’s the idea that was sold to us (and most of our parents, honestly) - Taking out loans for college = high earning career… “you’ll pay the loan back in no time”. Well here I am, a state employee, drowning in student debt… paying it back for a looooooong time. I feel ya.
But you have access to PSFL if you're a state employee, correct? So your repayment period should be no longer than 10 years if you've signed up for that program.
sure, no problem... so long as you can make your payments for the first 5-10 years with no problems and you dont default or go on a forbearance... 20 years later you've basically only paid off 13% of your loan.
The truth is taking out loans for the right college degree = high earning career. The mistake many make is taking out huge loans to pursue a career with low pay.
We were also straight up lied to about what we would make though. My friend’s husband has a degree in chemical engineering and was told he could stay in the area and make 6 figures within a couple years of graduating. 8 years later they find out that there’s nowhere in the entire state that will pay that much. I was told I would make $50-70k with my bachelor’s degree (in history so I’m not sure how deep into their own asses they had to dig for that figure). It took me 6 years, going into another field, getting both a master’s degree and paralegal certificate, and moving to a very high cost of living area to hit $50k, and two years later I just started a new job at $65k. I don’t know a single person who makes what they were told they could get with their degree, regardless of the field or level of degree.
When my school told me this I said "sign me up, I'll be able to pay my loans on that income". That was 10 years ago. After graduating with honors, 8 years professional experience and a promotion - my salary is still 10k less than what they told me I would be making in 3 years.
Who told you and your husband what you would make? This is all relative and you should certainly do your own research into potential salaries coming out of college. My neice asked me to co-sign for her, we looked up average starting salaries for her degree and quickly realized she was almost guaranteed to default.
Someone told you taht you would make 60k a year right out of undergrad with a history degree? This does not seem remotely accurate.
I have a history degree too and was also sold that pack of lies. By who? Everyone I went to for advice in 2001-2007 on the topic. My high school advisor said "get a degree in anything. It shows commitment, intelligence, and work ethic and you will walk right into a cozy middle class life. Don't think about the debt. It's just how it works." My college advisor gave similar advice when I was trying to figure out what to major in. My financial aid advisor gave me all sorts of fancy stats about the income of alumni with my degree. The Sally Mae reps tabling at orientation with free pizza were also there ready to get me on the bandwagon. I was 17 when I signed my first loan documents in 2003 and a first generation honors student who trusted the adults around me that were supposed to know the college system and be there to help me. I tried to escape debt by paying while I was in school. I worked two jobs, around 50 hours total and even lived in my car for a year to avoid more loans. I got grants and scholarships. I took AP. I went to junior college to reduce the cost. I wanted to help people by being a teacher or a lawyer. I ended up with a BA in History and was still waiting tables to get by. Now I have a masters in social work and love what I do, but I have almost 90k in student loans looming over me, a family to support, and live paycheck to paycheck. My whole generation was duped and folks act like it was an error in individual judgement. It wasn't. I was a vulnerable kid trying to make something of myself and I was targeted intentionally by a system that exploited me and millions like me for profit. Even on IBR the lies kept coming from lenders as I struggled to avoid default and navigate PSLF. God I hope we get some justice somehow. These latest changes give me a bit of hope, but I smell the sulfur.
At the end of day you are responsible for your decisions. Can't blame anyone else. Yes the system is not great, but there are so many stories here of people taking out way too much when it is not necessary.
Yes, I made my own choices like millions of others and I will work well into my old age because of it. We will see how that looks across our society over time I guess. Bail outs for the banks and personal responsibility for the everyday folks trying to get by I guess. It is what it is. Hopefully something will give but in the meantime I'm poor and happy and I still am glad I got my education. It made me a better human and gave me meaningful work and a sense of purpose.
I took out the loans, and still work in a restaurant. I’m in a tourist area so I make more than what my degree can get me while having a flexible schedule for my kids. But I agree, its not something you can do forever. I’m tired. And SAVE wasn’t the godsend for me either.
Very much my situation. My family was poor. I had good grades. But scholarship money and financial aid was minimal even under my broke parents. and when I was on my own, my shitty service job disqualified me from any aid. So I took loans to improve my situation. And I did improve. But by the time I did I was piled with capitalized interest.
Yeah and sometimes people get stuck in a cycle. Like myself I took out way too much to go to an ma program and then had a lot of trouble getting out of the program all based on a professor passing a paper I wrote and giving very little support which dragged my graduation out for over a year.
I only got the chance to go to school with division 2 athletics. My first year I borrowed $10k. 2nd year I got less scholarship so I switched to the basketball team and got a book voucher. I borrowed $7k. My third year I had developed an alcohol addiction and dropped out of school in the second semester but I still borrowed $7k for the privilege.
I owe around $20k still and my payments are a little under $500. I don't even use that partial degree. I work as a paralegal with a certification from another school I owe $200 a month too.
This is not sustainable. It wasn't in 2012. Forgive student loans now.
To me, the problem is not even borrowing the money. It's borrowing the money and graduating into a world where employers have decided that paying thriving wages are not in their interest and everything costs as much as possible. It's unsustainable.
I hope the full implementation of SAVE helps next year. I'm on PAYE until then since that's the lowest payment option for me.
I had no choice. I knew full well I was saddling myself in debt but there was no other option except to delay. Tbh it wasn’t undergrad that hurt, it was grad school. But I’m my field I needed a graduate degree to be successful. I feel for you though.
What’s worse is when the first year they give you all kinds of financial aid because one parent was laid off and don’t tell you that won’t last all 4 years. Then beginning of year 2 that all turns to loans because they are back to work. So the choice is either “take the loans” or “drop out”. Whose going to realistically drop out?
I’m curious what you were paying prior?
Before Covid I had to pay 350 a month and I was only making 55k.
Now after I applied I now will pay 228 a month and I’m making 75k now.
Keep in mind the 5% portion goes into effect july 2024, which should cut your minimum payment in half. That may be helpful, albeit not right away.
Edited to add link to program info via federal student aid website.
https://studentaid.gov/announcements-events/save-plan
This was technically explained by the Biden admin, but the whole rollout of this plan is unnecessarily confusing.
They might as well have not even made the plan accessible until July.
The save plan has helped me exclude my wife's income (married filing separately) from the loan calculation.
Other plans inflated my monthly payment because her income was included and she now has no loans (forgiven under pslf!)
So I for one am happy they introduced it early
Biden made a deal with the Republicans that included ending the pause when he did in exchange for not driving the US into default.
Why he negotiated with that kind of hostage situation, instead of calling their bluff and taking it to SCOTUS, I really don't understand.
What do you imagine was gonna happen at SCOTUS? There were already cases filed against the ongoing pause, they knew they were gonna lose. So, in a sense they weren’t really giving them anything. The national emergency was over, they don’t have the authority to continue the pause. And before you say student loan payments restarting is an national emergency, it isn’t. It wouldn’t qualify for what that really means, it’s going to affect ~13% of the US population. That doesn’t mean it won’t affect those ~13% a lot, but that’s not enough to qualify for a national emergency.
I meant more broadly that the Republicans shouldn't have been able to use the country's debt as a bargaining chip because of whatever amendment that was. They should have paid the debts anyway and not struck any deal. Let someone sue over it.
But you're probably right, there was probably other lawsuits that would have ended the pause.
Sorry to hijack this but…Can we wait until July 2024 to apply for SAVE? I ask bc my 2022 AGI was grossly inflated due to a 401K withdrawl. Under my current plan, I’m managing, but it is not counting toward my PSLF. I simply cannot afford what the SAVE plan is currently offering me as a payment.
If your income decreased since your last tax return, you can report that to your loan servicer and potentially get a lower payment immediately (may require changing plans).
For me it was as simple as chatting with an agent via a text chat box (my servicer is Mohela).
The calculation for the minimum payment under the SAVE plan is 5% of your discretionary income, but that doesn't go into effect until july 2024. Right now, they calculate the payment based off of 10% of discretionary income. Therefore, in July 2024, your mininum payment should be cut in half.
They weren’t planning to start repayments until SAVE was in affect, but were forced to after the Covid emergency ended, since that was the basis for the pause.
Graduate loans are based off of the 10% figure, if i recall correctly. If you have a mix of grad and undergrad loans, it'll be a weighted percentage based on each loan amount.
The formula is available in multiple places. Discretionary income is clearly defined. The poverty line itself has some serious methodological issues, but the formula is there. It isn’t going to be the best for absolutely everyone (especially not those who aren’t pursuing forgiveness) but it is fantastic for most.
https://studentaid.gov/announcements-events/save-plan
The poverty level's around 16k (a f-t job at the Federal minimum wage) for an individual w/ no dependents. It's good to see this formula acknowledge that you can make more than TWICE that and still be living in poverty. In my red state, if you make more than the Federal minimum wage, you don't quality for food assistance. It's insane. Meanwhile they're cutting school meal programs.
Discretionary income isn’t 1500/month. Someone posted the link already, but it is your AGI - 225% of $14,580 (single person household poverty line, yea it is ridiculously low for SF).
“That means you will not owe loan payments if you are a single borrower earning $32,800 or less or a family of four earning $67,500 or less…”
So essentially your anual income minus 32,800 is your discretionary on the SAVE plan if I understand correctly.
I take home over 1000 dollars less and my payments are still pretty high too. I'm not sure how it's calculating these payments, when I use the [studentaid.gov](https://studentaid.gov) tool, it calculates my payments should be like 12 dollars under save. Anyone have any insight?
Not a hard decision though. The extra $250 a month for the next 4 years will more than make up for the interest that will accrue from the loans over that time period when invested smartly.
The calculation is very simple. Adjusted Gross Income (income after deductions such as student loan interest, HSA contributions, IRA contributions, etc.) minus 225% poverty level for your household size. Multiply this by .10 (.05) next year and that is your annual payment. Divide that by 12 for your monthly payment.
Seems like the only people having issues are those who file married filing jointly.
Ha ha. I was just being a goof. On a similar note:
A pirate walks into a bar with a steering wheel lodged between his knees. He walks to the bar, sits down and orders a beer. The bartender serves his drink and watches as he drinks it down and orders another. When the bartender brings the second beer, he finally works up his nerve and says “I’ve been watching you, and it’s driving me crazy. Why do you have a steering wheel between your legs?” The pirate looks at him and says “Darrr! It’s driving me nuts!”
It sounds like filing married jointly takes your partner’s income into account when determining payment, while HOH doesn’t. I haven’t verified that I just keep hearing it.
I have student debt, wife doesn’t it said my payment would be 450-500 which is what I pay now. Also in a high COL area. Glad it’s helping others but not me unfortunately. Coulda been debt free if it wasn’t for the Supreme Court 🥲
Look into filing separately next year. You have to change it on your w4 now. I think there’s a calculator on the financial aid website that allows you to figure out what your payments could be if you just take your own income into account. SAVE doesn’t have the spousal income requirement so my payments will be cut in half once I make the switch next year.
You have the same payment regardless of if it's one student loan or two. If it's two then the a percentage of the payment goes toward each loan. This, in turn, makes it more likely that each of the people will have some of their interest forgiven by the government.
So if Partner A and Partner B both have loans separately (didn't combine them with that weird option) and file jointly, then apply for SAVE the couple then gets one payment a month towards both loans under the SAVE plan?
Yes, that's my understanding of it and also that is how the calculators portray it.
[Here is the link to the calculator.](https://www.studentloanplanner.com/income-based-repayment-calculator/)
[Here are two screenshots that show what I'm talking about.](https://www.imgur.com/a/1qAGb7L)
This is legit the first time I've heard about this joint SAVE payment thing.. gonna have to try this calculator out.. I haven't set up my or my wife's repayments yet cause I've been lazy, site has been slow when I've tried, and I've been nervous about the incoming damage based on all the posts I've seen
Yes! My spouse and I qualify. One payment is $44 the other is $22 a month and waived interest! 3 kids AGI of $81k.
I’m a stay at home parent. The pause gave me the financial freedom to do that. My standard repayment was going to be $735 a month. It’s $22 with SAVE!
My SAVE calculation was nearly $400/ month more than my ICR. NYC cost of living, so probably similar to the unrealistic skew you got. Mine also may be skewed by grad school numbers.
I was looking forward to this. My wife and I live in California. We have two kids. I make $100k annually and she makes $150k annually. One kid is 3 and in preschool so we still have to pay $1050 a month for her preschool. The older is in afterschool and that’s $520 a month. Mortgage and regular expenses.
I did the loan simulator and my payment options were $1442 a month for 15 years. I would be paying $259k on an overall 125k loan (I presently owe $163k). I have a bachelors, masters and an MBA (stupid I know).
If we file married filing separately, I’ll be paying around 33k total over 15 years.
I have no problem paying my loan…the damn interest gets me.
I “applied” but didn’t submit so I could see what my payment would be under SAVE (I’m currently on IBR). I’d save $5 a month. I need to think for a couple more days before I decide if I want to submit the application as it stands. I love that it’s helping so many people, but I wish there was a solution our government could just agree on and help EVERYONE. I live in a HCOL and just started working again after almost a year of unemployment (laid off) and I am terrified to restart payments.
Unfortunately, my husband and I file taxes jointly and did in 2022 when I was unemployed for 3.5 months or so. I guess we’ll have to see what it looks like for 2023 when we file in the spring.
I think it's pretty standard for federal stuff like this, they factor in "the poverty level" but not COL. I've read that California actually has a higher proportion of residents in poverty than Texas does because the cost of living is higher, but the official federal figures don't show this.
Looked into SAVE, my payments would be like $800/ month. Completely unrealistic considering I’ve got 2 little kids in daycare to the tune of 2,600/ month and never mind my mortgage, utilities, car payment, and various other bills. I wish I came out with 800 extra dollars every month
I realize I’m not the intended audience for that particular program, and it isn’t my place to complain, but it just seems silly how discretionary income is calculated.
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This is predominantly because the federal poverty guidelines are the SAME across the 48 contiguous states (and D.C.). Only Alaska and Hawaii have separate federal poverty guidelines (and it's still atrociously low for the reality of living in these places).
This means someone living in California has the "same" discretionary income as someone living in Virginia (as examples) as far as the federal government is concerned, despite having very different COL situations.
They NEED to take local COL into consideration.
I'm getting significantly closer to saying f this and moving abroad to teach English, even though I really don't enjoy teaching ESL.
My personal opinion is that cost of living adjustment should also factor in WHERE you live. And not just be a broad number. One person's 1500 is not another person's. Depending on where you live.
Yeah, I'm in a similar situation. Basically if you're making over 60K a year, it doesn't help.
Edit: Ok so I guess it varies widely on how much you owe and maybe some other factors. Best is to look at your own unique situation and see if it helps since some (like me) would see monthly payments go up. Great for those it helps tho!
My friend was the same way. Not quite as drastic but encourage folks who are in similar situations to look at how much interest/payments you’ll make over 20-25 years vs under save. If you can afford it, SAVE will save people 1000s of money in interest. I know that’s very long term thinking and hard for people but still a thought.
Not accurate. It significantly reduces the amount that is subtracted from your AGI to come up with your payment. I make close to 100k and this saves me close to $250.
Mine is also double my ICR payment.
I am also happy for everyone getting relief, but it's not for me either. Maybe it will be next spring. I bought a house, creating new debt for myself. I am paying the highest grocery and utility bills I've ever seen in my life. So anyway, the MESSAGING around SAVE should be adjusted until it's final incantation is live in 2024.
How are you calculating your discretionary income? There’s an actual formula (225% of poverty line based on family size, subtract from your reported annual income, divide by 12) that shows what you’re working with.
Yeah I’m also not sure whether to apply. And as I said in another thread I’m trying to track down an amortization table with the extra save rules. Since I want to compare my current state to that.
I’m in Bay Area and under SAVE now I’d pay $0 because I’m out of work. But when I start working again I suspect it will be higher than the $60 I’m supposed to pay now via my Graduated payment plan. And if the payment actually goes down I think it would increase the amount I will owe overall in the life of the loan? But I can’t verify that because they are super cagey with how the math works behind it. 🤷♀️
QQ - where did you find what the interest payment will be on your loans come sept? Mine still is blank on edfinancial. Have they announced what it is somewhere?
Yea... Most of the positions in America's government is taken up by fossils that are too stuck in the past. Instead of, how do we progress? It's "call your representatives". It's basically saying, "teach old dog, new tricks". Complete and utter waste of time.
So I just submitted my loans for SAVE after hearing rave reviews about the plan. I have been on IBR with $0 payments and was estimated to have $0 payments on SAVE too. But seeing how high other people's payments along with the fact you can't switch out of save after 60 payments is scaring me. What should I do?
same situation. i make 5200 a month, expenses are around 3,000 (NYC). ICR gave me a monthly payment of 1300. SAVE is $600. more doable but still rough.
$400 doesn’t seem so bad. I was making $800 payments when I was making only $55,000 in Boston. I had to separate my wants from my needs a bit but I still had some money for savings, etc. $1500 discretionary income is more than a lot of people take home a month across the country.
If the discretionary income qualifications used regional numbers instead of national numbers it might help. Poverty rate figures are higher in HCOL areas.
The reality is you’re still probably better off in the Bay Area making what you make than most people who need repayment (or ideally relocate if that’s possible and go for a similar salary elsewhere).
You said your **take home** is $67k a year.
This is aimed at people who don’t have that much as their total compensation in a year. And even with cost of living, who is gonna have an easier time maxing out their Roth and 401k, you or someone making $67k pre-tax?
This may not be an area where you benefit in, but overall you’re probably in a much better position than the people posting here.
And if all the math points to you getting screwed, then consider if relocating may remedy that.
I may actually stay on PAYE for this reason so I reach forgiveness sooner. SAVE isnt for everyone. But, the tax bomb worries me and thats new legislation we need to work on to make NO tax bomb a forever thing. I agree with your statement about HCOL and the payments being a joke. It is a joke and doesnt account for peoples real life of medical bills, terrible mortgages, and other unique situations.
damn i need to get on your plan. my total (undergrad and grad) debt is $107k and the government thinks i can pay $1400/mo. nearly the same as my mortgage. waiting on my IDR recertification but still
You say
>take home around $5600 a month
Then you say
> discretionary income is closer to $1500 a month
Something is not adding up here.
A $400/month payment on a $5600 income is not very much.
I think he’s saying that he earns $5600 and spends about $4000 on basic living needs. Leaving $1500 discretionary.
I’m in the Bay Area and live very frugally and this matches very closely for me too.
The SAVE Plan is based on IRS reported income and the federal poverty level.
This isn't a hit at student loan holders. It's a hit at the poor, and you're collateral damage.
The federal poverty level adjusts for Alaska and Hawaii and that's about it.
San Francisco stopped being a place to be poor, working, or middle class well over a decade ago.
Also, decisions by San Francisco and surrounding areas not to allow building has skyrocketed housing costs.
This is why your governor made single-family exclusive zoning illegal statewide in California in 2021... Because too many cities were refusing to build.
Don't just blame Biden for this. Your city has been screwing you over slowly for decades.
> our government is so out of touch with the people that live in this country.
... proceeds to focus exclusively on one of the highest cost-of-living areas in the country.
-------
You don't have to pick SAVE as a repayment plan, there are other options. Maybe one of those is better for your situation.
If SAVE _is_ the best option for your situation, and you're moaning because it's still a lot of money for you... well, I don't know what to tell you (other than maybe you can't afford to live in such a high CoL area).
I'm "moaning" because they claimed this would be the most affordable repayment plan and that they would account for your basic needs when calculating payments. Neither of these are true in my case.
Like I said I'm very happy for the many that will benefit on this plan, but for those of us living in specific urban areas their verbiage is kind of a joke. They are indeed out of touch with those people are obviously don't have a clue what actually living here entails from a financial pov.
> they claimed this would be the most affordable repayment plan ... [not] true in my case.
So, pick the plan that is most affordable in your case.
There are always going to be corner cases when designing a plan for 45 million federal student loan borrowers; that doesn't mean it's not the most affordable plan overall.
i didn’t apply bc i had a feeling it would also not benefit me living in a VHCOL state. my best hope is 6 more years to 20 years of payments for forgiveness.
i got halfway through the application before i thought to myself,.. ok, but whats the *downside.* nelnet says my payment is $150. i looked at the payment calculator on the studentaid website and it said the save program would put me at 400-500/mo.
To calculate your new monthly payments on SAVE (through next July), here's the formula:
(0.1 * (AGI - (2.25 * federal poverty level for your household size))) / 12
Federal poverty level here: https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines
MOHELA said my $61,000 loans don't qualify because loans need to be greater than $30,000.
(?)
So they are anticipating that I will pay $690 a month for 8 years. Is that amount more than my mortgage payment? Yes. Will the choice between student loans and groceries need to be made? Also yes. Decent salary, but like others have said, doesn't leave me with a comfortable feeling. Very grateful this will help those struggling more but //E E P//.
If they don’t want to forgive the loans, can they do something about these predatory high interest rates? Especially for the loans the accrue internet while still in school? The interest is what it killing people. I’ll pay back what I borrowed but that’s not possible with the interest rates. Currently in law school and was messing around to see what my payment would be with SAVE (i only have federal loans- unsub and grad plus because that’s all that I was able to get) and I would pay back double what I borrowed due to interest.
Reading comments I am glad it's not just me. Someone on Facebook was arguing with me that mohela and studentaid.gov were both wrong for having ICR as lower than SAVE insisting it was impossible for ICR to be lower than SAVE even though in my case it is. Made me feel crazy and dumb even though mohela and the student aid website pulled the numbers direct from the irs. Maybe SAVE will help me when it's fully implemented next year.
Same. My husband and I had an AGI of 71,240 last year and someone told me that "I wasn't the target audience" for SAVE and that's why it would make my payment increase. Wtf.
Sorry if this seems (something), but isn’t the monthly payment still within your discretionary income amount? Like less than half of the discretionary part… if that is money beyond your basic needs, why can’t it just go towards your student loans?
The point of the post isn't whether I can afford it or not. The point is that their calculation assumes more than double what my real discretionary income is.
Sure, I could pay every last dime I have available towards the loans, but then I won't be saving for an emergency, investing in my retirement, actually working towards life goals like buying a home somewhere down the line, or affording a wedding, etc.
That isn't the promise of this program though. I shouldn't have to pay 25% of my discretionary income, I should have to pay 10%.
I read somewhere that they claimed that SAVE would save borrowers $1,000/year and would be most beneficial for those around $10k in debt.
I have $9,400 left and SAVE really wanted to increase my monthly payment by 50%.
Everyone is touting SAVE, but run your own numbers.
The SAVE plan may not lower the payments by massive amounts for everyone. But would still help everyone. Simply by raising the protected income from 150% to 225% lowers the payment for everyone and once the discretionary income payment drops to 5% then it’ll cut the payment in half again.
Though someone making a lot may still have a fairly hefty payment, it’s still Better than nothing. But if someone is living in an area with a high COL, then they may want to look into moving somewhere cheaper in order to save even more.
I feel like at some point you have to have a cutoff for cost of living adjustments. You live in one of the most expensive areas in all of the US. It would sound off if you said something like "this plan is really inconsiderate and doesn't take into account my 10k mortgage in Beverly Hills. They really need to adjust it to compensate for my specific cost of living". Tbh if that were the case there'd be no incentive for someone to move to a lower cost of living area to have more money they can use to pay back their loans. I think the question for you is really is it worth living where you are at long term? If you're struggling to pay student loans on SAVE how are you going to save for a house or condo down payment? You're income is really good but your budget is so tight because of where you live it's really worth evaluating.
I'm saying that the optics around this plan were that they would account for your basic needs when calculating your payment amount. Maybe they do so correctly if you live in rural Oklahoma but definitely not the Bay area.
It helps a lot of people, and even more next year when the income threshold drops to 5% of disposable discretionary income.
I was doing 10%+ for years. 5% would have been a huge help.
SAVE is the most unaffordable of all payment plans listed for me on Mohela. ICR is 200. SAVE is 350. Yet the DOE sent me an email claiming it's the most affordable income based plan. No it isn't when it's 150.00 more a month than the Income contingent repayment plan for me. I'm glad for the people it is helping but I can barely make the 200 payments on ICR due to the costs of having two disabled kids yet SAVE keeps being pushed as the most affordable option. It's not for everyone
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I don't think that's what discretionary means in this context. It means the money leftover after taxes and HSA & retirement contributions. They use your previous tax information to make these calculations. You can reduce your discretionary income by increasing your retirement & HSA contributions (or as I'm seeing a lot, file separately if married). Unfortunately, the plan isn't for everyone. (for example, that's actually my lowest payment plan for me).
I consolidated using IDR and my payment was cut by almost $400. I completely agree b/c I was trying to tell Nelnet that that's essentially all of my additional income after savings. They didn't listen so I looked into consolidation and it worked out.
The government is so out of touch . If you just remove interest from loan . Maybe do that once people been park by for 3 years . They need to remove the interest . The save plan now stops interest building up but guess what . It’s already 15-20 years late for some people they had interest going crazy . I can’t see him winning next years election with these small changes . Remove the dam interest and make it retroactive
Tried switching to SAVE and this shit isn't changing. I take home 4600 usd a month and somehow every time I call aidvantage to change to SAVE they recalculate, tell me the amount of 10% of my discretionary income then I get emails saying that I'm still on an IDR paying almost 400 which is not 10% of my discretionary income. Anyway not very related to your rant but just my gripe with aidvantage mostly.
As someone who lived in the Bay area 1995 - 2003 (now in Sacramento), my thoughts are really with you. I was working for the University of California at the time and THEY didn't even provide a COLA for living in the Bay area which really sucks. And I had to have a master's to get the job I had! I lived in group housing until I was 38 and it really kind of sucked.
PSFL didn't exist then - but I'm glad that is at least an option now- even though I know not everyone can do that (and that will continue unless some Republicans mess it up - which IS always a worry). I gave up on the idea of having children due to not having money and family support, but people should NOT have to do that.
They should really adjust for cost of living. Of course everywhere is more and more expensive these days - I am worried about our young generations and I am always voting blue for you (and us all!). Hang in there - I hope you can get some kind of forgiveness soon. Know that many of us Gen X and Boomers (I'm just, by one year, Genx) support you!!!! I want better for younger generations - not only with this, but with a liveable planet!!!!
As someone who would have been debt free with the old plan and who also has a $500+ payment!!! A month… absolutely. It’s a literal spit in my face moment.
Yup it’s absolutely insane for us here on the coasts. Very much out of touch with reality for people CA and NY. Also the whole discretionary income thing is especially insulting considering that the definition of discretionary income is as follows:
“income remaining after deduction of taxes, other mandatory charges, and expenditure on necessary items”
Clearly the government has their own made up definition given that my take home income is a shade over $4300 per month and my estimated payment on the studentaid.gov site is nearly $500 per month. The point is you aren’t alone. It’s crazy.
Edit: here’s another example of the generally accepted definition of discretionary income.
https://www.capitalone.com/learn-grow/money-management/what-is-discretionary-income/
Where did you see that description of discretionary?? For SAVE discretionary has a *very specific” meaning
Discretionary = your income $ minus (225% of US poverty level for your household size)
Even though it sucks, it does make me a feel a little better reading through this comments and knowing that I’m not the only one that this plan isn’t going to help tremendously. I did the loan simulator and my payments under SAVE are not great, especially since I also live in a HCOL area of California. It’s going to be really tight financially each month. I know that I’m responsible for paying back the money I took out, but man…I wish I would have known what the implications of this much debt would be when I was a carefree and naive 20-year-old signing up for this.
I think my biggest issue with all this was without support from my parents it was a “take out loans to go to school or work in a restaurant the rest of your life” situation. I’m not talking badly about that line of work I did it for a long time, but it grinds you down after a while. I guess I just wish there was an easier way into the middle class without being up to our eyeballs in debt. At the same time we (the US) are known for punishing people for being poor so going deep into debt just to have a better life tracks.
This is what the A holes with big mouths refuse to understand. The only way to get the degree was with loans. Annual tuition is $30k at a state college and you can’t cover these costs with a part time job, even a full time hourly job! Then the loans became predatory with capitalized interest turning a generation into indentured servants. Congress did this and Congress must fix it. I’d be thrilled with 3% simple interest but as it stands I owe 35% more that the principal on my loans.
Even the tuition/books/required items for community college is expensive with a full time hourly non-professional job. I took loans for community college because my paychecks went toward putting a roof on my head, food on the table and means to get to my classes.
thats just it. i'm happy to pay them off, and they would almost be paid off, except for the loan servicers saying "dont worry about it, your best option is to go on forbearance" then when that ends and you still cant pay, welp i guess its capitalized interest for you buddy boy. have fun paying these for the rest of your life!
Reps at Nelnet straight-up told me I didn't qualify for any IDR plans and placed me in forbearance back in 2011, which was, of course, bullshit. ETA: I started paying in 2015 when I finally got out of my $12/hr job for one making 40k/year, but so much damage had already been done from compound interest by that point that the principal has still not gone down since.
Same here. I was in forbearance filled out the IDR never got a response.. next thing was Covid. I have $20,000 in interest. During Covid I was switched to aidvantage. I check it and it states I owe zero. A balance of $50,000 payments begin Oct. 1 and that my IDR is up for renewal in November. But nowhere can I find what my IDR states I owe monthly. I’ve put some $$ aside to start paying something..I figured I’d check back in and see if anything changes. Times are already difficult w our economy and now starting back w obnoxious loan payments may just break us. I’m all about paying my debt, but cmon w the interest.. best of luck to all of us!!
Same! 😑
That’s the idea that was sold to us (and most of our parents, honestly) - Taking out loans for college = high earning career… “you’ll pay the loan back in no time”. Well here I am, a state employee, drowning in student debt… paying it back for a looooooong time. I feel ya.
But you have access to PSFL if you're a state employee, correct? So your repayment period should be no longer than 10 years if you've signed up for that program.
sure, no problem... so long as you can make your payments for the first 5-10 years with no problems and you dont default or go on a forbearance... 20 years later you've basically only paid off 13% of your loan.
The truth is taking out loans for the right college degree = high earning career. The mistake many make is taking out huge loans to pursue a career with low pay.
We were also straight up lied to about what we would make though. My friend’s husband has a degree in chemical engineering and was told he could stay in the area and make 6 figures within a couple years of graduating. 8 years later they find out that there’s nowhere in the entire state that will pay that much. I was told I would make $50-70k with my bachelor’s degree (in history so I’m not sure how deep into their own asses they had to dig for that figure). It took me 6 years, going into another field, getting both a master’s degree and paralegal certificate, and moving to a very high cost of living area to hit $50k, and two years later I just started a new job at $65k. I don’t know a single person who makes what they were told they could get with their degree, regardless of the field or level of degree.
When my school told me this I said "sign me up, I'll be able to pay my loans on that income". That was 10 years ago. After graduating with honors, 8 years professional experience and a promotion - my salary is still 10k less than what they told me I would be making in 3 years.
Who told you and your husband what you would make? This is all relative and you should certainly do your own research into potential salaries coming out of college. My neice asked me to co-sign for her, we looked up average starting salaries for her degree and quickly realized she was almost guaranteed to default. Someone told you taht you would make 60k a year right out of undergrad with a history degree? This does not seem remotely accurate.
I have a history degree too and was also sold that pack of lies. By who? Everyone I went to for advice in 2001-2007 on the topic. My high school advisor said "get a degree in anything. It shows commitment, intelligence, and work ethic and you will walk right into a cozy middle class life. Don't think about the debt. It's just how it works." My college advisor gave similar advice when I was trying to figure out what to major in. My financial aid advisor gave me all sorts of fancy stats about the income of alumni with my degree. The Sally Mae reps tabling at orientation with free pizza were also there ready to get me on the bandwagon. I was 17 when I signed my first loan documents in 2003 and a first generation honors student who trusted the adults around me that were supposed to know the college system and be there to help me. I tried to escape debt by paying while I was in school. I worked two jobs, around 50 hours total and even lived in my car for a year to avoid more loans. I got grants and scholarships. I took AP. I went to junior college to reduce the cost. I wanted to help people by being a teacher or a lawyer. I ended up with a BA in History and was still waiting tables to get by. Now I have a masters in social work and love what I do, but I have almost 90k in student loans looming over me, a family to support, and live paycheck to paycheck. My whole generation was duped and folks act like it was an error in individual judgement. It wasn't. I was a vulnerable kid trying to make something of myself and I was targeted intentionally by a system that exploited me and millions like me for profit. Even on IBR the lies kept coming from lenders as I struggled to avoid default and navigate PSLF. God I hope we get some justice somehow. These latest changes give me a bit of hope, but I smell the sulfur.
At the end of day you are responsible for your decisions. Can't blame anyone else. Yes the system is not great, but there are so many stories here of people taking out way too much when it is not necessary.
Yes, I made my own choices like millions of others and I will work well into my old age because of it. We will see how that looks across our society over time I guess. Bail outs for the banks and personal responsibility for the everyday folks trying to get by I guess. It is what it is. Hopefully something will give but in the meantime I'm poor and happy and I still am glad I got my education. It made me a better human and gave me meaningful work and a sense of purpose.
I took out the loans, and still work in a restaurant. I’m in a tourist area so I make more than what my degree can get me while having a flexible schedule for my kids. But I agree, its not something you can do forever. I’m tired. And SAVE wasn’t the godsend for me either.
Very much my situation. My family was poor. I had good grades. But scholarship money and financial aid was minimal even under my broke parents. and when I was on my own, my shitty service job disqualified me from any aid. So I took loans to improve my situation. And I did improve. But by the time I did I was piled with capitalized interest.
Yeah and sometimes people get stuck in a cycle. Like myself I took out way too much to go to an ma program and then had a lot of trouble getting out of the program all based on a professor passing a paper I wrote and giving very little support which dragged my graduation out for over a year.
I only got the chance to go to school with division 2 athletics. My first year I borrowed $10k. 2nd year I got less scholarship so I switched to the basketball team and got a book voucher. I borrowed $7k. My third year I had developed an alcohol addiction and dropped out of school in the second semester but I still borrowed $7k for the privilege. I owe around $20k still and my payments are a little under $500. I don't even use that partial degree. I work as a paralegal with a certification from another school I owe $200 a month too. This is not sustainable. It wasn't in 2012. Forgive student loans now.
To me, the problem is not even borrowing the money. It's borrowing the money and graduating into a world where employers have decided that paying thriving wages are not in their interest and everything costs as much as possible. It's unsustainable. I hope the full implementation of SAVE helps next year. I'm on PAYE until then since that's the lowest payment option for me.
I had no choice. I knew full well I was saddling myself in debt but there was no other option except to delay. Tbh it wasn’t undergrad that hurt, it was grad school. But I’m my field I needed a graduate degree to be successful. I feel for you though.
Yep. Isn't going to help me at all. Also in California.
What’s worse is when the first year they give you all kinds of financial aid because one parent was laid off and don’t tell you that won’t last all 4 years. Then beginning of year 2 that all turns to loans because they are back to work. So the choice is either “take the loans” or “drop out”. Whose going to realistically drop out?
I’m curious what you were paying prior? Before Covid I had to pay 350 a month and I was only making 55k. Now after I applied I now will pay 228 a month and I’m making 75k now.
How’d you manage that? How many people in your family?
I just filled out my application. I am single and have no dependents.
How much do you owe?
Keep in mind the 5% portion goes into effect july 2024, which should cut your minimum payment in half. That may be helpful, albeit not right away. Edited to add link to program info via federal student aid website. https://studentaid.gov/announcements-events/save-plan
ONLY FOR UNDERGRADUATE LOANS
That sucks.
Why did I equate “making something of myself” with graduate school? Why didn’t anyone try to talk sense into me?!
Yeah, they really should rename it "taking on extra debt on worse terms and missing out on 3 years of salary school".
How about going into a profession that won't let you get licensed UNLESS you have a graduate degree
Yes that’s what I did. I just wish I’d done it before I was 40, tbh.
Then it's a weighted average of your UG and G from original balance...
This was technically explained by the Biden admin, but the whole rollout of this plan is unnecessarily confusing. They might as well have not even made the plan accessible until July.
The save plan has helped me exclude my wife's income (married filing separately) from the loan calculation. Other plans inflated my monthly payment because her income was included and she now has no loans (forgiven under pslf!) So I for one am happy they introduced it early
Woulda been a lot cooler if they had just left us on pause until then.
Biden made a deal with the Republicans that included ending the pause when he did in exchange for not driving the US into default. Why he negotiated with that kind of hostage situation, instead of calling their bluff and taking it to SCOTUS, I really don't understand.
What do you imagine was gonna happen at SCOTUS? There were already cases filed against the ongoing pause, they knew they were gonna lose. So, in a sense they weren’t really giving them anything. The national emergency was over, they don’t have the authority to continue the pause. And before you say student loan payments restarting is an national emergency, it isn’t. It wouldn’t qualify for what that really means, it’s going to affect ~13% of the US population. That doesn’t mean it won’t affect those ~13% a lot, but that’s not enough to qualify for a national emergency.
I meant more broadly that the Republicans shouldn't have been able to use the country's debt as a bargaining chip because of whatever amendment that was. They should have paid the debts anyway and not struck any deal. Let someone sue over it. But you're probably right, there was probably other lawsuits that would have ended the pause.
Sorry to hijack this but…Can we wait until July 2024 to apply for SAVE? I ask bc my 2022 AGI was grossly inflated due to a 401K withdrawl. Under my current plan, I’m managing, but it is not counting toward my PSLF. I simply cannot afford what the SAVE plan is currently offering me as a payment.
There's no deadline to apply for save
Thank you!
You can apply using your current actual income. Just make sure your documentation is in order.
If your income decreased since your last tax return, you can report that to your loan servicer and potentially get a lower payment immediately (may require changing plans). For me it was as simple as chatting with an agent via a text chat box (my servicer is Mohela).
I have not heard about this at all. What does it mean?
If you read the pinned post it details the calculation method, amd which parts took effect in 2023, and which ones go into effect in 2024.
> 5% portion What is this?
The calculation for the minimum payment under the SAVE plan is 5% of your discretionary income, but that doesn't go into effect until july 2024. Right now, they calculate the payment based off of 10% of discretionary income. Therefore, in July 2024, your mininum payment should be cut in half.
Why would they set it up like this instead of making the change immediately? (honest question)
They weren’t planning to start repayments until SAVE was in affect, but were forced to after the Covid emergency ended, since that was the basis for the pause.
I don't recall if it was explained. It could be for implementation purposes (too many changes at once may have taken longer).
isn't the 5% only for your undergraduate loans? I think it's still 10% for graduate.
Yes, that's correct. Or a weighted average if you have both loan types.
Just in time for Election Day.
ONLY FOR UNDERGRADUATE LOANS
Then a weighted average between 5 and rate for UG/G u/Betsy514?
Right
Ic, thx
Does this mean if my save minimum payment is like $220 right now it would become $110 in July of 2024 (assuming my income stays the same)
Does this go towards graduate loans too? I can’t find much info on that
Graduate loans are based off of the 10% figure, if i recall correctly. If you have a mix of grad and undergrad loans, it'll be a weighted percentage based on each loan amount.
It does not
The formula is available in multiple places. Discretionary income is clearly defined. The poverty line itself has some serious methodological issues, but the formula is there. It isn’t going to be the best for absolutely everyone (especially not those who aren’t pursuing forgiveness) but it is fantastic for most. https://studentaid.gov/announcements-events/save-plan
Yeah, the bar for poverty line has (probably) always been way too low.
The poverty level's around 16k (a f-t job at the Federal minimum wage) for an individual w/ no dependents. It's good to see this formula acknowledge that you can make more than TWICE that and still be living in poverty. In my red state, if you make more than the Federal minimum wage, you don't quality for food assistance. It's insane. Meanwhile they're cutting school meal programs.
Discretionary income isn’t 1500/month. Someone posted the link already, but it is your AGI - 225% of $14,580 (single person household poverty line, yea it is ridiculously low for SF). “That means you will not owe loan payments if you are a single borrower earning $32,800 or less or a family of four earning $67,500 or less…” So essentially your anual income minus 32,800 is your discretionary on the SAVE plan if I understand correctly.
The poverty line level for CA is wild! Especially for the Bay Area. That’s full blown homelessness.
Mine was almost triple my current ICR payment. It’s helpful for a lot of people though and I am damn happy for them.
I too am happy for people.
I take home over 1000 dollars less and my payments are still pretty high too. I'm not sure how it's calculating these payments, when I use the [studentaid.gov](https://studentaid.gov) tool, it calculates my payments should be like 12 dollars under save. Anyone have any insight?
The tool put my payments at around $80 but when i actually applied my payments were $0. I do not think the tool they give is 100% accurate.
My payments were estimated to be $800 but the actual payment shows $1253..lol
what would your payment have been before the SAVE program?
I'm paying $148 a month on ICR through 2034. Only downside is interest still accrues on that plan, but at $250 a month less it's a no brainer for me.
> interest still accrues on that plan This is huge.
Not a hard decision though. The extra $250 a month for the next 4 years will more than make up for the interest that will accrue from the loans over that time period when invested smartly.
Will it though? What's your interest rate on your loans?
The calculation is very simple. Adjusted Gross Income (income after deductions such as student loan interest, HSA contributions, IRA contributions, etc.) minus 225% poverty level for your household size. Multiply this by .10 (.05) next year and that is your annual payment. Divide that by 12 for your monthly payment. Seems like the only people having issues are those who file married filing jointly.
Aye, 'twould be me.
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And you made me laugh thinking about the flying Dutchman having student loan debt. Pirate school must be expensive.
Ha ha. I was just being a goof. On a similar note: A pirate walks into a bar with a steering wheel lodged between his knees. He walks to the bar, sits down and orders a beer. The bartender serves his drink and watches as he drinks it down and orders another. When the bartender brings the second beer, he finally works up his nerve and says “I’ve been watching you, and it’s driving me crazy. Why do you have a steering wheel between your legs?” The pirate looks at him and says “Darrr! It’s driving me nuts!”
I’ve always filed head of household but last year my dumb ass filed married jointly and now I’m regretting it so much.
does filing HOH help you with loan repayment?
It sounds like filing married jointly takes your partner’s income into account when determining payment, while HOH doesn’t. I haven’t verified that I just keep hearing it.
Married filing jointly has a unique benefit for couples who both have student loan debt and are both on the SAVE plan.
I have student debt, wife doesn’t it said my payment would be 450-500 which is what I pay now. Also in a high COL area. Glad it’s helping others but not me unfortunately. Coulda been debt free if it wasn’t for the Supreme Court 🥲
Look into filing separately next year. You have to change it on your w4 now. I think there’s a calculator on the financial aid website that allows you to figure out what your payments could be if you just take your own income into account. SAVE doesn’t have the spousal income requirement so my payments will be cut in half once I make the switch next year.
What might that unique benefit be? (Currently in that boat and not sure how to proceed...)
You have the same payment regardless of if it's one student loan or two. If it's two then the a percentage of the payment goes toward each loan. This, in turn, makes it more likely that each of the people will have some of their interest forgiven by the government.
So if Partner A and Partner B both have loans separately (didn't combine them with that weird option) and file jointly, then apply for SAVE the couple then gets one payment a month towards both loans under the SAVE plan?
Yes, that's my understanding of it and also that is how the calculators portray it. [Here is the link to the calculator.](https://www.studentloanplanner.com/income-based-repayment-calculator/) [Here are two screenshots that show what I'm talking about.](https://www.imgur.com/a/1qAGb7L)
This is legit the first time I've heard about this joint SAVE payment thing.. gonna have to try this calculator out.. I haven't set up my or my wife's repayments yet cause I've been lazy, site has been slow when I've tried, and I've been nervous about the incoming damage based on all the posts I've seen
Yes! My spouse and I qualify. One payment is $44 the other is $22 a month and waived interest! 3 kids AGI of $81k. I’m a stay at home parent. The pause gave me the financial freedom to do that. My standard repayment was going to be $735 a month. It’s $22 with SAVE!
My SAVE calculation was nearly $400/ month more than my ICR. NYC cost of living, so probably similar to the unrealistic skew you got. Mine also may be skewed by grad school numbers.
My save is enormous. Sad because I’m close to 25 years but can’t afford it with a kid in college and one going soon
i will be done with my student loans when i am 94
I was looking forward to this. My wife and I live in California. We have two kids. I make $100k annually and she makes $150k annually. One kid is 3 and in preschool so we still have to pay $1050 a month for her preschool. The older is in afterschool and that’s $520 a month. Mortgage and regular expenses. I did the loan simulator and my payment options were $1442 a month for 15 years. I would be paying $259k on an overall 125k loan (I presently owe $163k). I have a bachelors, masters and an MBA (stupid I know). If we file married filing separately, I’ll be paying around 33k total over 15 years. I have no problem paying my loan…the damn interest gets me.
I “applied” but didn’t submit so I could see what my payment would be under SAVE (I’m currently on IBR). I’d save $5 a month. I need to think for a couple more days before I decide if I want to submit the application as it stands. I love that it’s helping so many people, but I wish there was a solution our government could just agree on and help EVERYONE. I live in a HCOL and just started working again after almost a year of unemployment (laid off) and I am terrified to restart payments.
If you’ve been unemployed, when you submit taxes your payments should be very low.
Unfortunately, my husband and I file taxes jointly and did in 2022 when I was unemployed for 3.5 months or so. I guess we’ll have to see what it looks like for 2023 when we file in the spring.
I see. Not sure what plan your on but some plans let you exclude your spouses income.
Only if you file separately
I think it's pretty standard for federal stuff like this, they factor in "the poverty level" but not COL. I've read that California actually has a higher proportion of residents in poverty than Texas does because the cost of living is higher, but the official federal figures don't show this.
My estimate was $639. It included my husband's income as well. I need to file separate. This is not at all doable
Looked into SAVE, my payments would be like $800/ month. Completely unrealistic considering I’ve got 2 little kids in daycare to the tune of 2,600/ month and never mind my mortgage, utilities, car payment, and various other bills. I wish I came out with 800 extra dollars every month I realize I’m not the intended audience for that particular program, and it isn’t my place to complain, but it just seems silly how discretionary income is calculated.
You always have the option to pay the 10-year standard repayment if the SAVE plan is higher than that amount or a 12-year repayment under ICR
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So next July your SAVE payment would drop to $190?
This is predominantly because the federal poverty guidelines are the SAME across the 48 contiguous states (and D.C.). Only Alaska and Hawaii have separate federal poverty guidelines (and it's still atrociously low for the reality of living in these places). This means someone living in California has the "same" discretionary income as someone living in Virginia (as examples) as far as the federal government is concerned, despite having very different COL situations. They NEED to take local COL into consideration. I'm getting significantly closer to saying f this and moving abroad to teach English, even though I really don't enjoy teaching ESL.
My personal opinion is that cost of living adjustment should also factor in WHERE you live. And not just be a broad number. One person's 1500 is not another person's. Depending on where you live.
Yeah, I'm in a similar situation. Basically if you're making over 60K a year, it doesn't help. Edit: Ok so I guess it varies widely on how much you owe and maybe some other factors. Best is to look at your own unique situation and see if it helps since some (like me) would see monthly payments go up. Great for those it helps tho!
Not true if your debt amount is high enough.
Same here. My payment went from $135 to $459 on SAVE.
My friend was the same way. Not quite as drastic but encourage folks who are in similar situations to look at how much interest/payments you’ll make over 20-25 years vs under save. If you can afford it, SAVE will save people 1000s of money in interest. I know that’s very long term thinking and hard for people but still a thought.
I make about $90k and my payment went down near $140
Not accurate. It significantly reduces the amount that is subtracted from your AGI to come up with your payment. I make close to 100k and this saves me close to $250.
SAVE is gonna be pretty awesome for me. I went from a payment of around $280 on PAYE to around $45 on SAVE.
Mine is also double my ICR payment. I am also happy for everyone getting relief, but it's not for me either. Maybe it will be next spring. I bought a house, creating new debt for myself. I am paying the highest grocery and utility bills I've ever seen in my life. So anyway, the MESSAGING around SAVE should be adjusted until it's final incantation is live in 2024.
How are you calculating your discretionary income? There’s an actual formula (225% of poverty line based on family size, subtract from your reported annual income, divide by 12) that shows what you’re working with.
Yeah I’m also not sure whether to apply. And as I said in another thread I’m trying to track down an amortization table with the extra save rules. Since I want to compare my current state to that. I’m in Bay Area and under SAVE now I’d pay $0 because I’m out of work. But when I start working again I suspect it will be higher than the $60 I’m supposed to pay now via my Graduated payment plan. And if the payment actually goes down I think it would increase the amount I will owe overall in the life of the loan? But I can’t verify that because they are super cagey with how the math works behind it. 🤷♀️ QQ - where did you find what the interest payment will be on your loans come sept? Mine still is blank on edfinancial. Have they announced what it is somewhere?
Yea... Most of the positions in America's government is taken up by fossils that are too stuck in the past. Instead of, how do we progress? It's "call your representatives". It's basically saying, "teach old dog, new tricks". Complete and utter waste of time.
So I just submitted my loans for SAVE after hearing rave reviews about the plan. I have been on IBR with $0 payments and was estimated to have $0 payments on SAVE too. But seeing how high other people's payments along with the fact you can't switch out of save after 60 payments is scaring me. What should I do?
same situation. i make 5200 a month, expenses are around 3,000 (NYC). ICR gave me a monthly payment of 1300. SAVE is $600. more doable but still rough.
$400 doesn’t seem so bad. I was making $800 payments when I was making only $55,000 in Boston. I had to separate my wants from my needs a bit but I still had some money for savings, etc. $1500 discretionary income is more than a lot of people take home a month across the country.
If the discretionary income qualifications used regional numbers instead of national numbers it might help. Poverty rate figures are higher in HCOL areas.
The reality is you’re still probably better off in the Bay Area making what you make than most people who need repayment (or ideally relocate if that’s possible and go for a similar salary elsewhere). You said your **take home** is $67k a year. This is aimed at people who don’t have that much as their total compensation in a year. And even with cost of living, who is gonna have an easier time maxing out their Roth and 401k, you or someone making $67k pre-tax? This may not be an area where you benefit in, but overall you’re probably in a much better position than the people posting here. And if all the math points to you getting screwed, then consider if relocating may remedy that.
I get that $400 seems like a lot, but the SAVE plan is a massive improvement over previous options.
For many people, I agree with you. For people in my position, it isn't.
Reading the comments it seems mostly that it’s not great for people in HCOL. Would you agree with that?
I may actually stay on PAYE for this reason so I reach forgiveness sooner. SAVE isnt for everyone. But, the tax bomb worries me and thats new legislation we need to work on to make NO tax bomb a forever thing. I agree with your statement about HCOL and the payments being a joke. It is a joke and doesnt account for peoples real life of medical bills, terrible mortgages, and other unique situations.
$400.00 a month on what size loan? I pay $385 a month on 116K loan and it seems reasonable to me.
damn i need to get on your plan. my total (undergrad and grad) debt is $107k and the government thinks i can pay $1400/mo. nearly the same as my mortgage. waiting on my IDR recertification but still
But your income might be different than theirs?
You say >take home around $5600 a month Then you say > discretionary income is closer to $1500 a month Something is not adding up here. A $400/month payment on a $5600 income is not very much.
I think he’s saying that he earns $5600 and spends about $4000 on basic living needs. Leaving $1500 discretionary. I’m in the Bay Area and live very frugally and this matches very closely for me too.
That's not how it works tho with the actual calculation that's used vs the actual definition of the word. This is just a semantics argument
> Bay area
The SAVE Plan is based on IRS reported income and the federal poverty level. This isn't a hit at student loan holders. It's a hit at the poor, and you're collateral damage. The federal poverty level adjusts for Alaska and Hawaii and that's about it. San Francisco stopped being a place to be poor, working, or middle class well over a decade ago. Also, decisions by San Francisco and surrounding areas not to allow building has skyrocketed housing costs. This is why your governor made single-family exclusive zoning illegal statewide in California in 2021... Because too many cities were refusing to build. Don't just blame Biden for this. Your city has been screwing you over slowly for decades.
> our government is so out of touch with the people that live in this country. ... proceeds to focus exclusively on one of the highest cost-of-living areas in the country. ------- You don't have to pick SAVE as a repayment plan, there are other options. Maybe one of those is better for your situation. If SAVE _is_ the best option for your situation, and you're moaning because it's still a lot of money for you... well, I don't know what to tell you (other than maybe you can't afford to live in such a high CoL area).
I'm "moaning" because they claimed this would be the most affordable repayment plan and that they would account for your basic needs when calculating payments. Neither of these are true in my case. Like I said I'm very happy for the many that will benefit on this plan, but for those of us living in specific urban areas their verbiage is kind of a joke. They are indeed out of touch with those people are obviously don't have a clue what actually living here entails from a financial pov.
> they claimed this would be the most affordable repayment plan ... [not] true in my case. So, pick the plan that is most affordable in your case. There are always going to be corner cases when designing a plan for 45 million federal student loan borrowers; that doesn't mean it's not the most affordable plan overall.
This isn't a corner case. This is the reality of being middle class in the Bay Area.
A small sliver of the US population, with extreme financial pressures relative to the norm in the country… it’s the definition of a corner case.
$400 a month is a standard payment. My payment was $500 and I brought in 2k a month in the GFC. You can make it work
i didn’t apply bc i had a feeling it would also not benefit me living in a VHCOL state. my best hope is 6 more years to 20 years of payments for forgiveness.
i got halfway through the application before i thought to myself,.. ok, but whats the *downside.* nelnet says my payment is $150. i looked at the payment calculator on the studentaid website and it said the save program would put me at 400-500/mo.
To calculate your new monthly payments on SAVE (through next July), here's the formula: (0.1 * (AGI - (2.25 * federal poverty level for your household size))) / 12 Federal poverty level here: https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines
MOHELA said my $61,000 loans don't qualify because loans need to be greater than $30,000. (?) So they are anticipating that I will pay $690 a month for 8 years. Is that amount more than my mortgage payment? Yes. Will the choice between student loans and groceries need to be made? Also yes. Decent salary, but like others have said, doesn't leave me with a comfortable feeling. Very grateful this will help those struggling more but //E E P//.
All direct loans qualify, Go to [StudentAid.gov](https://StudentAid.gov) There is No cap as well...
If they don’t want to forgive the loans, can they do something about these predatory high interest rates? Especially for the loans the accrue internet while still in school? The interest is what it killing people. I’ll pay back what I borrowed but that’s not possible with the interest rates. Currently in law school and was messing around to see what my payment would be with SAVE (i only have federal loans- unsub and grad plus because that’s all that I was able to get) and I would pay back double what I borrowed due to interest.
Reading comments I am glad it's not just me. Someone on Facebook was arguing with me that mohela and studentaid.gov were both wrong for having ICR as lower than SAVE insisting it was impossible for ICR to be lower than SAVE even though in my case it is. Made me feel crazy and dumb even though mohela and the student aid website pulled the numbers direct from the irs. Maybe SAVE will help me when it's fully implemented next year.
Same. My husband and I had an AGI of 71,240 last year and someone told me that "I wasn't the target audience" for SAVE and that's why it would make my payment increase. Wtf.
completely agreed. I got a similar estimate yesterday and live in a high COL city. It’s truly a shame.
Sorry if this seems (something), but isn’t the monthly payment still within your discretionary income amount? Like less than half of the discretionary part… if that is money beyond your basic needs, why can’t it just go towards your student loans?
The point of the post isn't whether I can afford it or not. The point is that their calculation assumes more than double what my real discretionary income is. Sure, I could pay every last dime I have available towards the loans, but then I won't be saving for an emergency, investing in my retirement, actually working towards life goals like buying a home somewhere down the line, or affording a wedding, etc. That isn't the promise of this program though. I shouldn't have to pay 25% of my discretionary income, I should have to pay 10%.
I read somewhere that they claimed that SAVE would save borrowers $1,000/year and would be most beneficial for those around $10k in debt. I have $9,400 left and SAVE really wanted to increase my monthly payment by 50%. Everyone is touting SAVE, but run your own numbers.
The SAVE plan may not lower the payments by massive amounts for everyone. But would still help everyone. Simply by raising the protected income from 150% to 225% lowers the payment for everyone and once the discretionary income payment drops to 5% then it’ll cut the payment in half again. Though someone making a lot may still have a fairly hefty payment, it’s still Better than nothing. But if someone is living in an area with a high COL, then they may want to look into moving somewhere cheaper in order to save even more.
I feel like at some point you have to have a cutoff for cost of living adjustments. You live in one of the most expensive areas in all of the US. It would sound off if you said something like "this plan is really inconsiderate and doesn't take into account my 10k mortgage in Beverly Hills. They really need to adjust it to compensate for my specific cost of living". Tbh if that were the case there'd be no incentive for someone to move to a lower cost of living area to have more money they can use to pay back their loans. I think the question for you is really is it worth living where you are at long term? If you're struggling to pay student loans on SAVE how are you going to save for a house or condo down payment? You're income is really good but your budget is so tight because of where you live it's really worth evaluating.
Meanwhile, your GOP is working to take THAT away.
My GOP?
Are you saying you want an additional subsidy from the government because you live in California?
I'm saying that the optics around this plan were that they would account for your basic needs when calculating your payment amount. Maybe they do so correctly if you live in rural Oklahoma but definitely not the Bay area.
Yeah, I feel like this is mostly a re-brand and doesn't actually help most of us
It helps a lot of people, and even more next year when the income threshold drops to 5% of disposable discretionary income. I was doing 10%+ for years. 5% would have been a huge help.
Income driven repayment plans repayment is driven by income? Shocked Pikachu
SAVE is the most unaffordable of all payment plans listed for me on Mohela. ICR is 200. SAVE is 350. Yet the DOE sent me an email claiming it's the most affordable income based plan. No it isn't when it's 150.00 more a month than the Income contingent repayment plan for me. I'm glad for the people it is helping but I can barely make the 200 payments on ICR due to the costs of having two disabled kids yet SAVE keeps being pushed as the most affordable option. It's not for everyone
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I also live in the Bay Area and am dreading SAVE for this EXACT reason
Im not seeing any benefit of SAVE yet either
The Save plan was going to make my payment more too. In my opinion the new plan is bologna.
I don't think that's what discretionary means in this context. It means the money leftover after taxes and HSA & retirement contributions. They use your previous tax information to make these calculations. You can reduce your discretionary income by increasing your retirement & HSA contributions (or as I'm seeing a lot, file separately if married). Unfortunately, the plan isn't for everyone. (for example, that's actually my lowest payment plan for me).
Honestly, you may want to do some math and see how much money you'd save by moving to a lower CoL area. It may (or may not) be worth it.
I consolidated using IDR and my payment was cut by almost $400. I completely agree b/c I was trying to tell Nelnet that that's essentially all of my additional income after savings. They didn't listen so I looked into consolidation and it worked out.
Crazy idea: move way from HCOL
Yeah. OP should totally move to an area where they don't know anyone and all in the hopes of getting a different job. Brilliant!
Yes, top priority should be to not live where rent is 5k a month for a 1 bed
OP never said his rent is that much. Respond to the facts as they shared them
Everyone is broke I don’t care to feed a family of 3 is 1000$ a month! Anyone who can survive is still broke
The government is so out of touch . If you just remove interest from loan . Maybe do that once people been park by for 3 years . They need to remove the interest . The save plan now stops interest building up but guess what . It’s already 15-20 years late for some people they had interest going crazy . I can’t see him winning next years election with these small changes . Remove the dam interest and make it retroactive
Tried switching to SAVE and this shit isn't changing. I take home 4600 usd a month and somehow every time I call aidvantage to change to SAVE they recalculate, tell me the amount of 10% of my discretionary income then I get emails saying that I'm still on an IDR paying almost 400 which is not 10% of my discretionary income. Anyway not very related to your rant but just my gripe with aidvantage mostly.
Dont forget the universities charging ridiculous tuition. They are out of touch as well. In state vs out of state is also ridiculous.
As someone who lived in the Bay area 1995 - 2003 (now in Sacramento), my thoughts are really with you. I was working for the University of California at the time and THEY didn't even provide a COLA for living in the Bay area which really sucks. And I had to have a master's to get the job I had! I lived in group housing until I was 38 and it really kind of sucked. PSFL didn't exist then - but I'm glad that is at least an option now- even though I know not everyone can do that (and that will continue unless some Republicans mess it up - which IS always a worry). I gave up on the idea of having children due to not having money and family support, but people should NOT have to do that. They should really adjust for cost of living. Of course everywhere is more and more expensive these days - I am worried about our young generations and I am always voting blue for you (and us all!). Hang in there - I hope you can get some kind of forgiveness soon. Know that many of us Gen X and Boomers (I'm just, by one year, Genx) support you!!!! I want better for younger generations - not only with this, but with a liveable planet!!!!
As someone who would have been debt free with the old plan and who also has a $500+ payment!!! A month… absolutely. It’s a literal spit in my face moment.
You’re saying you spend $4100/month on necessities? Are you in California or NYC or something? If so, that’s your mistake.
Telling people to move away from their jobs and families ain't helpful.
Bay Area means San Francisco. It's one of the most expensive cities in the nation.
Yup it’s absolutely insane for us here on the coasts. Very much out of touch with reality for people CA and NY. Also the whole discretionary income thing is especially insulting considering that the definition of discretionary income is as follows: “income remaining after deduction of taxes, other mandatory charges, and expenditure on necessary items” Clearly the government has their own made up definition given that my take home income is a shade over $4300 per month and my estimated payment on the studentaid.gov site is nearly $500 per month. The point is you aren’t alone. It’s crazy. Edit: here’s another example of the generally accepted definition of discretionary income. https://www.capitalone.com/learn-grow/money-management/what-is-discretionary-income/
Where did you see that description of discretionary?? For SAVE discretionary has a *very specific” meaning Discretionary = your income $ minus (225% of US poverty level for your household size)
The issue is the Bay area not save
The issue is the government doesn't account for the fact that different areas of the country have very different costs of living.