Do loan repayment begin during residency?

[PhD2MD]

Do you need to start paying back loans during residency? Its seems that with a high debt load, and low resident salary it would be tough to get by. I was wondering if loan repayment was ever deffered until after residency.

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[Ross434]

Do you need to start paying back loans during residency? Its seems that with a high debt load, and low resident salary it would be tough to get by. I was wondering if loan repayment was ever deffered until after residency.

It all depends. You can defer some kinds of federal loans until after residency, for various reasons (interest does not accrue) Private loans, you sometimes have to forbear, which means interest accrues over the period.

 

[PhD2MD]

Generally speaking, do most resident begin repayment, or defer/forbear until they are making the big bucks. Its scary to think that a resident could have to begin paying back over 200K in debt on a 40k salary.

 

[Ross434]

Generally speaking, do most resident begin repayment, or defer/forbear until they are making the big bucks. Its scary to think that a resident could have to begin paying back over 200K in debt on a 40k salary.

It depends on your situation. Some residents with households and a working spouse begin paying them back. I suspect most defer if they can.

 

[synapse lapse]

No, you can defer through residency. Residency is educational training, and thus any loans that allow you to defer while you maintain half time status in school may be deferred. Specifically, if you have Stafford loans from the federal government you can defer them. Some private loans won't let you defer, as Ross434 said, but most will.

 

[DrOctopus]

No, you can defer through residency. Residency is educational training, and thus any loans that allow you to defer while you maintain half time status in school may be deferred. Specifically, if you have Stafford loans from the federal government you can defer them. Some private loans won't let you defer, as Ross434 said, but most will.

This was the case for the past 10 or so years. However, as the wonderful loan executive from Bank One described it to our class in August, this July the powers that be in the Federal government get to reassess how they do educational loan business--from interest rate calculation to repayment scheduling. One of the things he mentioned is that there is legislation/regulation pending that could eliminate the continuing education deferment for residents. If this was the case, residents could claim an economic hardship deferment, but apparently those are much more difficult to get. I don't know. It was all speculation then, but we'll all know in July.

 

[teamdick]

Mr. Pink, residency does NOT count as educational training since you are drawing a salary. Deferral of government sponsored loans such as Stafford and Perkins depends on your monthly loan payment and your salary. If your loan payment is greater than 20% of your salary, then you can defer. Spousal income does not count towards this. Depending on the type of loan, it may accrue interest. Deferral usually lasts a max of 3 years (reapply yearly) depending on your loan company. If you are still in residency after 3 years, you can then apply for forbearance. Some loan companies allow you to defer in residency even if you don't qualify for deferral or forbearance. To the OP, don't worry about the loans. Unless there is some drastic change by the time you sign for your loans, you won't be paying them until after residency.

 

[synapse lapse]

Mr. Pink, residency does NOT count as educational training since you are drawing a salary. Deferral of government sponsored loans such as Stafford and Perkins depends on your monthly loan payment and your salary. If your loan payment is greater than 20% of your salary, then you can defer. Spousal income does not count towards this. Depending on the type of loan, it may accrue interest. Deferral usually lasts a max of 3 years (reapply yearly) depending on your loan company. If you are still in residency after 3 years, you can then apply for forbearance. Some loan companies allow you to defer in residency even if you don't qualify for deferral or forbearance. To the OP, don't worry about the loans. Unless there is some drastic change by the time you sign for your loans, you won't be paying them until after residency.

I am sorry, you are correct, I was mistaken that the 2 year Internship/Residency Deferment was still in effect (only for loans prior to 93). Thanks for correcting me. Your advice was correct, deferall is a max of 3 years (given in 1 year increments) and after that, Economic hardship forbearance kicks in, but during this period you acrue interest on previously subsidized loans and your interest rate rises slightly. Thanks for god info.

OP, here are some sites:

http://studentloan.citibank.com/slc...n.citibank.com/slcsite/repay/defer/1a6d15.asp

http://www.aamc.org/students/financing/debthelp/moneymatters/forbearance.htm#mm342

 

[masterMood]

i don't get all this terminology, forbearance, stafford/perkins loans,

any links to understand all these loans and interest stuff?

 

[synapse lapse]

i don't get all this terminology, forbearance, stafford/perkins loans,

any links to understand all these loans and interest stuff?

deferrel means that you defer payment of loans - interest doesn't acrue on subsidized loans and continues to acrue on unsubsidized loans

forbearance means that you are forbearing payment pending your finding suitable employment, etc - interest starts acruing on previously subsidized loans and interest rates rise slightly

stafford is the name of the federal loan program, perkins is another federal loan primarily for those with demonstrated financial need in addition to stafford loans. The stafford loan limit for med school is $38,500 a year, of which $8,500 (I think?) is subsidized limit. Subsidized means that the government charges you no interest on the loan for which time you are in school half time or deferring payment. Hope that helps.

 

[masterMood]

yep that helps thanks