Home |SAVE Plan | You could pay $0/month with the old repayment plan (if your income was low enough). But you still got hit with growing interest.Is that the case with the SAVE plan? Does interest still acrue even if paying $0?

You could pay $0/month with the old repayment plan (if your income was low enough). But you still got hit with growing interest.Is that the case with the SAVE plan? Does interest still acrue even if paying $0?

Abbey Johnson, Helping with Student Loan Documentation
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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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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