Is the SAVE plan beneficial if you have a high salary?
I’m quite confused about the SAVE plan. I have $56,000 in federal student loans and currently earn over $150,000 a year. My expenses are very high, and as the sole provider with a baby on the way, we don’t have much disposable income despite this salary. Would the SAVE plan be advantageous for me? I’m currently on a 25-year repayment plan with monthly payments of $300.
Perhaps. What is your overall strategy for handling the loans are you planning to pay them off in full, pursue a forgiveness program (if so, which one?), or consider another approach?
I’m aiming to get the lowest monthly payment possible now and defer dealing with it until later 
Consider using a graduated repayment plan. Consolidation can extend the repayment period even more.
SAVE estimated I’d owe around $1,000 a month, but my graduated consolidated payment is only $90.
I could pay off the loan in full right now, but I have other financial priorities. I’ll apply a bonus to the loans in a few years when it’s more feasible. This also gives me time to explore potential forgiveness options, especially since Biden promised some relief and my income is still below the forgiveness threshold.
This is my approach too. I’m surprised by how many people here are insistent on paying off their loans in full or making large payments given the current uncertain political and economic situation. I didn’t realize so many have that much cash available, but it is a large subreddit.
I plan to reassess after the election next year and adjust my strategy. For now, I’d prefer to keep my money in a high-yield account and focus on other financial goals.
It largely depends on how much more than the interest amount you can afford to pay each month. For example, if you’re accruing $500 a month in interest on a $100,000 loan at 6% and your minimum payment is $800 a month, but you can afford to pay $3,000 a month, why prolong the loan for 25 years and end up paying over $200,000 in total? You could instead pay it off in under 4 years for around $115,000 and be done with it.
The same reason I rent instead of buying property: flexibility and opportunity.
Given your high income, the SAVE plan might not be the most beneficial option for you.
While it offers potential for loan forgiveness after a certain period, your monthly payments could be higher than your current $300 under the 25-year plan.