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Association of American Medical Colleges Tomorrow's Doctors, Tomorrow's Cures®

FIRST for Pre-health Advisors

Pre-health Advisors

Resources for staff who advise aspiring medical students

Loan Repayment Options

With medical school behind you, you’re certainly due for congratulations. But that’s not all that’s due – loan payback time is just around the corner – either beginning now or when residency is over. Fortunately, when it’s time to repay, you have a good deal of flexibility in structuring your repayment schedule by choosing the plan that works best for you.

Refer to the repayment plans compared chart  to determine which repayment plan works for you.

Standard Repayment

  • Fixed monthly payment with possibly the lowest interest-cost plan
  • 10-year repayment term (longer if consolidated)
  • Default plan if no other plan is chosen

Extended Repayment

  • Reduced payments stretched over a longer term (without consolidating)
  • Up to 25-year repayment term; to be eligible, must owe more than $30,000
  • Can be more costly because of lengthened term

Graduated Repayment

  • Initially smaller payments that increase after 2-years; payment based on income
  • 10-year repayment term (longer if consolidated)
  • May result in higher costs compared to the Standard plan

Income-Contingent Repayment (DL only)

  • Lower monthly payments with capitalization limited to 10% of the original amount owed*
  • Payments based on the lesser of either 20% of monthly discretionary income or a 12-year payment plan times a percentage (based on income)
  • 25-year term and then remaining balance forgiven; need to re-apply each year

Income-Sensitive Repayment (FFELP only)

  • Reduced monthly payments; payment based on income
  • Payment must cover monthly accruing interest
  • 10-year term (longer if consolidated), must apply annually

Income-Based Repayment

  • Lower monthly payment based on family size and AGI
  • Payment "caps" at 15% of your discretionary income
  • 25-year term and then remaining balance forgiven
  • Partial Financial Hardship needed to qualify
  • Income and family size verification required annually

Pay As You Earn Repayment (DL only)

  • Offers possibly the lowest monthly payment; based on family size and AGI (verified annually with servicer)
  • Payment "caps" at 10% of your discretionary income
  • 20-year term and then remaining balance forgiven
  • Interest capitalization is capped at 10% of original amount owed*
  • Partial Financial Hardship needed to qualify

* When borrower entered repayment

When Do You Start Repaying?

About a month or two before your first payment is due, you’ll receive a notice from your loan servicer(s) that will tell you the due date of your first payment, the payment amount, current information about interest rates, and your total outstanding balance. Be sure your loan servicer(s) have your accurate contact information because whether you receive a statement or not, your payments must be received on time.

About Your Options

You’ll want to select a plan that provides a manageable payment amount, but keep in mind that lower isn’t always better. Aim for a repayment schedule that allows you to meet all of your financial needs and goals, and if your financial situation changes, know that you can change your repayment plan by contacting your servicer(s).  For an example of what your monthly payment might look like, review the charts within the Education Debt Manager .

See chart on Interest Cost Comparison: Forbearance During Residency

Monthly Payment During ResidencyRepayment Plan Repayment Years After ResidencyEstimated Monthly Payment after ResidencyInterest CostTotal Repayment




$0Graduated10$1,300 for 2-years then $3,300 for 8-years$176,000$351,000
$0Income-Contingent Repayment (ICR)7.6

$3,200 to $3,700 over 7.6 years



$0Income-Sensitive Repayment (ISR)10$1,300 for 1-year then $3,000 for 9-years$149,000$324,000
$0Income-Based Repayment (IBR)11.3

$2,300 to $2,800 over 11.3 years

$0Pay As You Earn


$1,600 to $2,700 over 18.3 years



Assumptions: Medical student borrows $170,000 in principal during medical school with subsidized Stafford Loans during the first three-years only. After graduating, s/he immediately begins six-month grace period, and then chooses forbearance during a four-year residency. Post-residency starting salary is $180K (in 2011 dollars) and repayment balance is approximately $243,000, which includes $48,000 in unpaid interest that capitalized at the end of residency.

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The First Steps to Successful Student Loan Repayment

Video with play button

The key to successful repayment is to get organized and this process should begin well before graduation.

Medloans® Organizer and Calculator

Medloans Organizer and Calculator

Organize and track your loans, then view sample repayment scenarios with the Medloans® Organizer & Calculator, the only Web tool of its kind developed for medical students.