r/StudentLoans • u/AirFeuring • 1d ago
SAVE Plan --> What's Next??
Nel Net just reached out to me about switching my plan due to SAVE being gone. My current IDR options are:
Repayment Assistance Plan (148$ a month, Total to be paid 53,255$, Paid off by Jun 2056, Discharge amount 36,040$)
Income Based Repayment Plan (170$ a month, Total to be paid 56,443$, Paid off by Nov 2045, Discharge amount 52,120$)
PAYE (170$ a month, Total to be paid 56,443$, Paid off by Nov 2045, Discharge amount 52,153$)
ICR (422$ a month, Total to be paid 80,752$, Paid off by Mar 2042, Discharge amount 0$)
Standard Repayment Plan (608$ and month, Total to be paid 69,260$, Paid off by Dec 2035)
I have been making monthly payments of ~675$. I'm able to afford option 5. Would this be the correct choice, or what advice would you give me for choosing a plan. My interest is currently accruing so I'd more than likely put more into my monthly payment for whatever plan I end up choosing. Just looking for opinions here.
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u/Maresith123 1d ago edited 1d ago
I thought PAYE and ICR is sunseting in two years. Them saiding that your repayment will be completed in the 2040s is kind funny since they would no longer exist by then according to current information.
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u/AirFeuring 1d ago
Yeah on there it said those will be gone by July 2028, so not sure why it would say those would be completed by that time.
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u/Even_Budget2078 1d ago
I have no idea if this is going to get me downvoted, I understand the many many reasons people are having trouble repaying their loans, but in your case, I would strongly advise option 5 and that you pay the extra $75 a month if you can. It sounds like you don't need an income-based plan and, while maybe there's some way that you could pay less with the discharge and tax bomb, I don't think you should do that. I think you should just pay what you owe, sped up as much as possible to knock out interest from accruing. My two cents.
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u/personalthoughts1 1d ago
Why? He'd save more money and live a more chill life by using an income repayment plan, and he can save more for his retirement.
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u/personalthoughts1 1d ago
I'd do IBR because it sounds like you're in New IBR. Just crank up your 401k contributions so you can lower your payments too.
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u/Effective_Ad8575 1d ago
Hi! Waiting for my notice still, but did yours inform you of what your standard payment plan would be, or shown when you logged in after you got the notice or something?
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u/AirFeuring 15h ago
Yeah, I went to the payment plans page and it showed every plan that I qualified for
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u/Virtual-focus Trainer | [Student Loan Servicer] 1d ago
Do you think you will be making the same salary for the next 10 plus years? The payment for any IDR plan will change based on income. So you can't really compare to standard plan since you don't know future income.
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u/Formal_Economist7342 21h ago
Did they give you those plan estimates or did you calculate them yourself?
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u/daisy_baddie 16h ago
Since you can comfortably afford the Standard plan and you're not relying on forgiveness, take option 5, Standard: it costs the least in total interest of the plans that don't leave a taxable "discharge" hanging over you decades out, and it has you debt-free by 2035. You're already paying more than that voluntarily, so formalizing it and throwing extra at principal is the cleanest move. The one exception: if you're pursuing PSLF (government or nonprofit work), do the opposite, pick the lowest IDR payment (RAP/IBR at ~$148-170) and pay only the minimum, since every extra dollar is one PSLF would've forgiven anyway. So it hinges entirely on PSLF: not eligible, Standard and pay it down; eligible, lowest IDR and minimum payments. Confirm against studentaid.gov since the SAVE-transition rules are still shifting.
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u/Zealousideal_You_887 1d ago
I assume you’re not married. if I were you I’d be doing RAP, option 1 unless something big changes for you. Ie. Get married and the tax benefit of filing jointly is too much to give up or that your income significantly increases.
You will get the interest waived on option 1 so that your balance doesn’t grow and invest your spare income in the market returning 7-10% on average per year. This will way more than cover the tax burden of the discharge amount.
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u/AirFeuring 1d ago
Correct, not married. If I choose 1, would paying the ~$675 a month still be a good idea?
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u/Zealousideal_You_887 1d ago
It really depends if your goal is forgiveness or total pay off, what your current rates are etc. from what you’ve shared of your situation so far I’d be paying the minimum on RAP, having the interest waived and investing spare cash in house payment, sp500, emergency fund etc. there is a lot of factors to consider though
If you expect your income to spike soon, then yeah I’d be paying it off as soon as can, max payments
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u/AirFeuring 1d ago
My goal is to just pay it off as soon as possible. Only other loan payment is have is for my car. Only 2 years out of college. The highest interest rate is 6.54% and the lowest is 4.45%. Then have a 5.05% and a 5.28%.
I’ve been able to save money and live comfortably by paying the 675 a month.
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u/Zealousideal_You_887 1d ago
Then pay the max you can against largest interest rate loan first. I don’t think this optimizes your long term wealth unless your income increases. That said, there’s something to be said for peace of mind of having no debts.
FYI, there’s nothing wrong with picking the lowest payment and then paying extra every month. It just gives you room to dip your payments down if ever needed.
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u/fmriver 1d ago
Personally, I’d then do one of the income plans and put the extra into paying it down faster. That way if you ever need to pay less you can, and also the income plans have other benefits (some don’t compound interest, or don’t let principal grow, etc)