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Why doesn’t the government take into account my high cost of living area or other debts in my monthly SAVE payment of Student loan?

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Abbey Johnson, Helping with Student Loan Documentation
Answered on October 02,2023

You chose to live in a high cost of living area and the government isn’t in the business of subsidizing such choices. The 225% of the federal poverty line calculation is meant to take into account some cost-of-living adjustments. If you decide to move to a lower cost of living area with a lower paying job, your student loan would be decreased due to the lower paying job. If you can move to a lower cost of living area with the same or greater income, this will just generally be less of an issue due to having more discretionary income.

It’s unfortunate that you are in other debt, but these income-based plans are already very generous. If they permitted additional benefits to those with giant mortgages or private student loans, borrowers would get bigger mortgages. Similarly to the above, the government cannot provide additional benefits in these situations based on your decisions. You can always go on the standard repayment plan or extended graduated plan if that benefits your situation more than an income-based plan.

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Ultimate Guide on SAVE Plan - Payment Calculation, Interest, Forgiveness

Under the Saving on a Valuable Education (SAVE) plan, a single borrower who makes less than $15 an hour will not have to make any payments. Borrowers earning above that amount would save mor..
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