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Here's what else to know.

Many borrowers' bills will be cut in half

The SAVE plan is an income-driven repayment plan that can cut borrowers' monthly payments in half, according to the Education Department. Some of the benefits of the plan won't fully go into effect until next summer, due to the timeline of regulatory changes. Instead of paying 10% of their discretionary income a month toward their undergraduate student debt under the previous Revised Pay As You Earn Repayment Plan, or REPAYE, borrowers will eventually be required to pay just 5% of their discretionary income.

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The reduction in payments on undergraduate loans to 5% from 10% of discretionary income will be available to borrowers in July 2024, when the SAVE plan is fully implemented. At that point, borrowers who have both undergraduate and graduate loans will pay a weighted average between 5% and 10% of their income based upon their original principal balances, the Education Department said. But borrowers who enroll now in the SAVE plan — or before bills restart in the fall — should see certain benefits sooner.

New payment amounts could kick in by fall

Most borrowers who apply for the SAVE plan by mid-August should see their new monthly payment amount reflected in their autumn statement, according to the Education Department. Even before the drop to 5% of income, many people will see lower bills. That's because the SAVE plan also increases the income exempted from the payment calculation to 225% of the poverty line, from 150%.