SAVE Plan Interest Subsidy Calculator

Quantify how the SAVE plan's unpaid-interest subsidy prevents balances from growing. Provide your current federal loan balance, blended interest rate, and SAVE payment to see the monthly interest that accrues, how much the subsidy erases, how much interest you still pay, and what portion of your payment actually reduces principal. Adjust the subsidy percentage if you need to model plans with partial interest support.

Total Direct Loan balance eligible for SAVE. Use the current statement balance before any new payments.
Enter your blended interest rate across all loans included in the SAVE payment.
Your calculated SAVE payment based on discretionary income and family size. Enter $0.00 if you currently owe nothing.
Optional — defaults to 100%. Adjust if modeling a plan with only partial unpaid interest coverage.

For exact SAVE payment calculations and subsidy application, rely on your loan servicer or Department of Education resources.

Examples

  • Example 1 — $60,000.00 balance, 6.80% rate, $220.00 payment, subsidy left blank ⇒ Monthly accrued interest: $340.00 | Subsidized interest: $120.00 | Borrower interest after subsidy: $220.00 | Principal reduction from payment: $0.00 | Annual subsidy value: $1,440.00 | Interest coverage: 100.00%
  • Example 2 — $35,000.00 balance, 5.50% rate, $300.00 payment, subsidy left blank ⇒ Monthly accrued interest: $160.42 | Subsidized interest: $0.00 | Borrower interest after subsidy: $160.42 | Principal reduction from payment: $139.58 | Annual subsidy value: $0.00 | Interest coverage: 100.00%

FAQ

How do I estimate my SAVE payment amount?

Use your latest IDR recertification or loan servicer estimate. SAVE payments equal a percentage of discretionary income based on family size — plug that value directly into the monthly payment field.

What if part of my balance is at a different interest rate?

Compute a weighted average interest rate across all loans included in the SAVE payment, or run separate scenarios for each segment and add the subsidy amounts together.

Does this calculator handle graduated or extended repayment plans?

The subsidy is specific to income-driven plans like SAVE. For plans without interest subsidies, set the subsidy coverage to 0% to see how fast interest would grow.

Can I model partial interest coverage for older REPAYE rules?

Yes. Enter 50% in the subsidy field to reflect legacy REPAYE treatment of unpaid interest on unsubsidized loans.

Additional Information

  • SAVE covers 100% of unpaid monthly interest on both subsidized and unsubsidized Direct Loans, preventing negative amortization when payments are low.
  • The subsidy applies after your monthly payment is credited — any remaining unpaid interest is wiped out before capitalizing.
  • If you consolidate or switch plans, the subsidy resets based on the new interest rate and payment; rerun the calculator with updated numbers.
  • Payments above the accrued interest push the extra straight to principal, accelerating forgiveness timelines and lowering total interest paid.

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