If my monthly payment is zero under SAVE plan, is there any accruing interest?
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Answered on September 29,2023
Under the SAVE Plan, if you qualify for a $0 payment, interest is still being charged. However, there is a government interest subsidy to prevent your loan balance from growing due to unpaid interest.
If you’re eligible for a $0 payment, the government will cover your remaining unpaid interest for that month.
Since your $0 monthly payment in addition to the government interest subsidy was only enough to cover the interest that accrued for that month, your principal balance does not decrease.
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