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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

Postponing Loan Repayment During Residency

There's a benefit to federal student loans of which you may be unaware, and that's the ability to temporarily postpone your loan payments through grace, deferment or forbearance. When you're in the early phase of your medical career—and money is tight—a temporary reprieve may be the "budget-saver" you need.

Grace: What Is It?

Some loans automatically grant a “grace” period after graduation during which no loan payments are due. Although not all loans have grace periods, two that do are Stafford Loans (six months) and Perkins Loans (nine months).

The Loan Repayment Timeline  presents a visual comparison of loans and their accompanying grace periods. Check your promissory note(s) or contact your servicer(s) to determine if your loans offer a grace period.

Deferment: What Is It and Who Qualifies?

Deferment is a temporary suspension of loan payments, during which time interest does not accrue on subsidized loans.  There are various types of deferments available a complete list is included within the Education Debt Manager .

The eligibility for deferment can be restrictive, with many residents not qualifying, or at least not qualifying during the traditional residency timeframe.

Forbearance: Another Option

If you cannot afford to make payments on your student loans, and you are ineligible for a deferment (or have exhausted the deferment time limitations), a servicer can provide a forbearance, in increments of up to 12-months. This is a period of time during which you can either make payments lower than those previously scheduled or delay making payments completely.

During forbearance, interest is accruing on both subsidized and unsubsidized loans. Interest that is not paid as it accrues will be added to the loan’s principal through a process called capitalization.

Mandatory Medical Residency Forbearance

As a medical resident, you are entitled to this forbearance which is available in annual increments and can be used to postpone payments throughout residency. It is important to clearly identify yourself as a medical resident in order to get this forbearance from your servicer, and it is equally important to complete the proper forbearance paperwork.

To request a deferment or forbearance, contact your loan servicer(s).

The Alternative to Postponing Payments

The alternative to postponing payments while in residency is to make payments. Required payments can range from zero dollar payments (based on your current financial situation) all the way up to making full regular monthly payments. If you’re concerned that your salary is too low to afford payments, then the income-driven repayment plans may be worthy of consideration.

Payments under the income-driven plans are based on your discretionary income and family size. Some of these plans may even offer interest subsidies and loan forgiveness. To learn more about the repayment plans, visit the Federal Student Aid External Link Web site.

Income-Driven Plans 

Income-Based (IBR) External Link
Pay As You Earn External Link
Income-Contingent (ICR) External Link
Income-Sensitive (ISR) External Link 

Other Plans 

Standard External Link
Graduated External Link
Extended External Link

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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.