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Paying $0 Per Month On Your Student Loans

A zero-dollar monthly payment may seem like a scam or too good to be true, but it is a reality for some federal student loan borrowers.

Written By: Michael P. Lux, Esq.

Last Updated:

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Paying $0 Per Month On Your Student Loans

A zero-dollar monthly payment may seem like a scam or too good to be true, but it is a reality for some federal student loan borrowers.

Written By: Michael P. Lux, Esq.

Last Updated:

Affiliate Disclosure and Integrity Pledge

The idea of getting a bill for zero dollars from your student loan servicer may seem like a scam or too good to be true. Fortunately, due to income-driven repayment plans, a $0 bill is a real thing. These income-driven plans, or IDR plans, charge borrowers based upon what they can afford to pay instead of calculating payments based on how much they owe.

While there are some downsides to a zero-dollar payment, it is still a great option for many.

How do I get a $0 payment?

The biggest limitation with a zero-dollar payment is that it is only available on federal student loans. If you have private loans, it isn’t an option.

The next big limitation is that not everyone will qualify for a $0 payment. To get payments based upon how much you can afford, borrowers need to sign up for an income-driven repayment plan. The income-driven repayment plans, such as IBR, PAYE, and REPAYE, require payments of 10 to 15% of a borrower’s discretionary income. If the government formula determines that you do not have any discretionary income, your payment will be $0 per month.

Payments on income-driven repayment plans are calculated yearly. As income goes up or down, monthly payments will adjust accordingly.

Is a $0 Payment the same as a Forbearance or Deferment?

No. Forbearances or deferments do not usually last a year. There are also limits on deferments and forbearances, but there are no time limits for borrowers making zero-dollar payments on an income-driven repayment plan. Year after year a borrower may qualify for $0 payments.

Perhaps more importantly, $0 payments can count towards student loan forgiveness. All borrowers on income-driven repayment plans can have their loans forgiven after 20-25 years, depending upon the repayment plan selected. Best of all, eligible borrowers who are working in public service can have their zero dollar payments count towards the 120 required payments for public service loan forgiveness.

What is the downside of a zero-dollar payment?

It isn’t all good news for borrowers who qualify for a $0 payment. Even though they won’t be expected to pay anything each month, the student loan interest does not disappear. That means the loan balance will actually increase with each passing month.

Borrowers in this situation should all understand capitalized interest. This is when the extra interest gets added to a borrower’s account. When this happens, the borrower starts paying interest on the extra interest. This can drive the balance up very quickly. Thus, borrowers will want to be careful to avoid unnecessary capitalization of their interest… so don’t miss any income certification deadlines!

Do I need to mail a zero-dollar check or have my lender withdraw $0 from my bank account?

While borrowers have $0 payments, there is no need to send in a check or complete any additional paperwork each month. For the student loans without a required payment, borrowers just need to remember to certify their income before the lender imposed deadline.

About the Author

Student loan expert Michael Lux is a licensed attorney and the founder of The Student Loan Sherpa. He has helped borrowers navigate life with student debt since 2013.

Insight from Michael has been featured in US News & World Report, Forbes, The Wall Street Journal, and numerous other online and print publications.

Michael is available for speaking engagements and to respond to press inquiries.

61 thoughts on “Paying $0 Per Month On Your Student Loans”

  1. Hi
    I have a Income base loan and the payment is $0 monthly
    but I want to pay it down. I’ll say first off I’m very slow on
    understanding things and hope for simplified answers so
    I can at least hopefully understand. The balance is around
    $90000. I want to lower it but not spend a lot of time on interest.
    I want to pay down the principle to pay it out but I don’t have the
    money to pay nothing more than at the most $50 to 100 a month.
    But I’m on disability and my mom is the representative over it. I have
    a mental disorder so I need help in social setting things. I have bills
    of my own but I want to solve my student loan debt. Even if I filed
    for bankruptcy the stress would be too much. I tried working but
    the stress of being in a place with a lot of interaction almost led
    me to commit suicide. I know I must sound pathetic or something
    but I’m racking my head to correct the mistake that I could actually
    go to college with my ability. I just can’t keep up with anything.
    I just want to know if my payment is at 0 a month can I pay anything
    to lower the principle? To pay it off eventually?

    • I have a couple thoughts:

      1) If you are on disability, you may want to investigate disability discharge which could get your loan balance forgiven.

      2) As for the $50 to $100 per month that you are able to pay, I suspect most or all of that payment would first be applied to interest. Unfortunately, payments are first applied to interest.

  2. I do not quite understand. If i start the income based repayment plan while still in school and the payment is zero, can i still be borrowing while in school if i am close to my aggregate limit?

  3. Hi, hopefully I can still get a response to this. My wife had a 0 monthly payment on hey loans and if I qualify for the same can making something as small as 10 payments increase our credit score?

  4. I have had an IDR payment of $0 for about five years. On my income alone, I still qualify for $0 payment. Since my income will probably always be below poverty level, will I eventually get a loan forgiveness or am I going to have to pay the quickly accumulating interest.

  5. Hi Michael,

    It seems I have a $0 per month for a 185 month term loan, but I don’t know which one I have.
    Once the 185 months are completed, does that mean I am forgiven? If I want to buy
    a new car or even used car, will this prevent me from doing so? What about a house?
    I also have another issue going on, which is private, so how do I email you privately?
    Thank you.


    • Hi Alex,

      I have never heard of a 185 month term for a $0 per month loan. The $0 per month payments in this article are regarding Income-Driven Repayment plan payments, and those last for 12 months. At that point the borrower has to certify their income again, and the payments can continue at $0 for another 12 months, depending upon their income.

      The toolbox has articles on things like buying a car or house and how they are impacted by student loans: https://studentloansherpa.com/loan-toolbox/

      As for a private email, there is a link on the bottom of every page to “ask the Sherpa”. I get a lot of reader email, so I’m not able to respond to every question, but I will give it a shot.

      Best wishes

  6. I have 6 figure debt from one masters degree and I’m paying $0 with an IBR (due to lack of employment). I’d like to go back to school (for job training) for another masters. Would anyone lend me money even though I’m already in debt? Thanks!

    • Your best bet would probably be a graduate PLUS loan. The federal government credit check is far less strict than private lenders and there is no yearly cap on federal borrowing.

      I’d suggest reaching out to the office of financial aid at the school you are interested in attending for more details and assistance with funding the program.

  7. If I qualify for 0% payments on IBR for federal student loans, can I still make small payments on the loan to go towards the interest? Would that work?

    • Yes. You can always make extra payments on your loans. The $0 per month is just the minimum.

      The nice part about having the low minimum payment is that it allows you to attack your highest interest rate loans first. This gets the debt eliminated the fastest.

  8. Hi Sherpa, I’m about seven years into paying off my federal loans, and am still paying off the interest. I am on RePAYE and currently have $0 payments due to the fact that my wife and I were both out of work after a move when I last re-certified. Now we are both working, and I do have discretionary income. Am I expected to report this change now, or just wait til my next cert. date? Am I setting myself up for problems down the road by not paying anything while I have $0 payments? I am counting on forgiveness after a set number of payments, and I understand that $0 payments do count, so is there a reason I should make payments now, even if I’m not required to? My credit is pretty good so I’m not super worried on that front, just wondering if there’s something I’m not considering. Thanks!

  9. Hey Sherpa,

    I just got on the IDR and was floored when they said my monthly payment was 0. I thought there was some sort of mistake.

    Reading this, im a little more confident. I intend to finish school, and with this my loans get out of default. That should mean I qualify for Title IV again, right?

    And wouldn’t I qualify for deferment when im finally in school again?

  10. I have $0 payment from idr every month and I know the interest goes up and I’ve realized that lately. Can I make a small payment every now and then or twice a month to help myself or will that backfire on me by having them take the $0 away from me? I am just curious if making payments now of Small’s amounts will help or not.

    • Your monthly payments are based entirely upon you prior income certification. Even if you made very large payments, it would not change things. However, if you are earning more money, you should expect that you payments will go up next time you certify your income for your IDR plan.


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