Deferment Warning

[girlwithaknife]

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This probably applies more to people attending med school in places with lower cost-of-living and tuition expenses.

If you have been trying to minimize the amount of debt you take out while in med school, DO THE MATH NOW to find out whether or not you are going to be able to qualify for economic hardship deferment while in residency. I didn't realize how tricky this can be, but I found out recently that although I have almost $100,000 in stafford loans, there is a chance that I will not qualify for economic hardship due to the current low interest rates. You should be able to get the information regarding calculations for eligibility from your financial aid office. If you are at the end of your 3rd or 4th year of med school, do the calculations NOW. You need to find out whether your monthly payments (determined partly by this coming year's interest rate) will be high enough to allow you to qualify for economic hardship. Otherwise, say hello to forbearance and higher interest rates.

 

[docslytherin]

i was under the impression that the first three years were counted as in-school, educational deferrments (primarily so that programs can pay less than hourly minimum wage to residents) so you wouldn't have to worry about hardship deferrments until the end of the third year... is that not true any longer??

 

[Brewster]

You get an automatic 6 month grace period after graduation. Then you must qualify for economic hardship deferment (as the OP said).

If you do not qualify for economic hardship, you can still forbear for the duration of your residency. The difference is that in forbearance, all your loans accrue interest (rather than just the unsub portion) and the interest rate is a little higher (unless you locked in a low rate with consolidation).

 

[girlwithaknife]

You can only qualify for in-training, residency deferments if you have old loans (pre-1993). For those of us who didn't take out our first loans until after 1993, there is no residency deferment anymore.

 

[Andrew_Doan]

Originally posted by girlwithaknife
You can only qualify for in-training, residency deferments if you have old loans (pre-1993). For those of us who didn't take out our first loans until after 1993, there is no residency deferment anymore.

This is correct. And for those who did take loans out before 1993, consolidating resets the residency deferment for an additional 2 years.