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If my student loan repayment is $0 a month on the SAVE plan, am I still gonna get charged interest even if I’m following the “rules” of my plan and not paying anything?
If my student loan repayment is $0 a month on the SAVE plan, am I still gonna get charged interest even if I’m following the “rules” of my plan and not paying anything?
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Abbey Johnson, Helping with Student Loan DocumentationAnswered on September 29,2023
Interest resumed effective Sept. 1, 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..Click here to get a detailed guide
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