Some student loan borrowers have begun making payments ahead of the Oct. 1 deadline and have been surprised to see how much their payments are impacted. 

Under the new SAVE plan, payments are 10% of the borrower’s disposable income, defined as whatever they make beyond 225% of the poverty line. That means single borrowers who make $32,800 or less, or a family of four earning $67,500 or less, will have payments of $0. 

After borrowers make payments —even $0 payments—for 20 years (or 25 for grad school loans), any remaining balance is forgiven. Starting next July, payments will be even lower because borrowers with undergrad loans will only have to pay 5% of their income.

That’s a welcome development for borrowers, many of whom are in very different financial situations than they were three years ago when they last made payments. 

While a typical graduate of a four-year public university will save nearly $2,000 a year, borrowers in certain situations could save much more. Only 22% of bachelor’s degree borrowers will have to pay the full balance of their loans, and 11% of those with associate's degrees, the Urban Institute calculated.

The plan is most advantageous for borrowers with lower incomes and higher loan balances. On social media, some student loan borrowers were surprised at how much their payments went down by enrolling in SAVE. One Reddit user posted that their payments on $250,000 worth of student loan debt would only be $78 a month.  “I was pretty shocked that it would be so low,” the user wrote.  Another posted that their $1,479 a month payments went down to $179 after they called their student loan servicer and switched to SAVE.  “My kid likes to eat and have a house to live in (and so do I!), so I decided to just buckle down and get through a call, and I'm so glad I did,” the user wrote.

This article is the third in a five-part series reviewing the changes to the student loan landscape over the three years that payments on federal student loans have been paused. Other installments cover the changing financial situation of borrowers, changing rules for interest accumulation, how millions of borrowers got their loans forgiven under President Joe Biden, and other ways that the rules have been altered.