The Department of Education sent record payments to the U.S. Treasury in August, as debtors started making student loan payments again. Yahoo Finance Reporter Dani Romero joins the Live show to discuss this report and how Americans can utilize the SAVE plan before student loan payments restart in October.

Video Transcript

RACHELLE AKUFFO: The Department of Education sent record payments $6.4 billion to the Treasury in August as debtors started making student loan payments once again. But there's hope yet for those waiting until payments are required again in October. Yahoo Finance's Dani Romero joins us with more on that. Hey, Dani.

DANI ROMERO: Hi there, Rachelle. Well, it's that time of year to start thinking about budgeting, especially as student loan repayments are set to be due. There's been much discussion about that SAVE plan and how it works. Well, we're going to break it down for you by using one of our viewers' question.

Here it goes, here it is, "If I make $68,000 as a single person and my payments are at $312, is it worth it to apply to SAVE?" Before we jump in and calculate those monthly payments, we need to figure out what is Molly's discretionary income. That is the income that's left over after you pay those basic needs like food and rent.

And how are we going to calculate that? We're going to use the US Department's Health and Humanity Service Poverty guideline. That's on the studentaid.gov website. So for this person, specifically Molly, it is $14,580. We're going to multiply that by 225%. And we get $32,805. That is-- this is the poverty guideline, now we're going to subtract that from her net income and get her discretionary income, which is $35,195.

Then we're going to multiply that by 5%, which is under the SAVE plan, and we get $1,759.75. That is an annual payment, but then we're going to divide that by 12 and we get the monthly payment of $146.64. So definitely, Molly, your answer's here. You're going to pay less under the SAVE plan. Rachelle.