This is a tricky question.

Let me start by saying there is a category of reapyment plans where borrowers make payments based on their income. These are called income-driven repayment plans. Within the income-driven repayment plans there is Income-Contingent repayment (ICR), Income-Based Repayment (IBR), Pay As You Earn (PAYE) and Saving on A Valuable Education (SAVE).

The interest accrual rule is part of the SAVE plan. Specifically, SAVE provides borrowers a subisdy that covers 100% of the extra interest. For the borrowers making, $0 payments, that means it covers all of the interest each month.

If you are on the SAVE plan, you are covered. If you are on a different IDR plan, you are not.

I’ve been accepted into an IBR plan. My income is low, so my monthly repayment is $0. My reading of various articles indicates that if I meet minimum monthly payments, the interest does not accrue (accumulate is my provider’s term). Since my repayment is $0, am I “meeting minimum monthly payments”?

Thanks,

Caroline