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Graduated med school this past May. Loans are coming due this December/January. I currently owe over $300k in loans (that's principal and interest combined). Most are at 6.8%, a few are 7.9% and 8.5%.
I was planning on doing IBR so that I'd have a relatively low monthly payment ($400-500) while in residency. That way, I'd be able to pay more if I was able, but the minimum payment wouldn't be outrageous.
Thing is, I was speaking to my loan servicer, and that lady actually suggested that I go into "intership-residency forebearance" instead. Her argument was that I would still be able to make payments if I so desired, but that there would be no minimum payment I'd have to make each month, in case money was tight at some point. Now, going into forebearance would certainly drop me out of qualifying for PSLF, but I wasn't too interested in that anyway.
Seems like there should be a downside to doing this, but I haven't been able to come up with the information. Does anyone know if interest capitalizes annually while in forebearance? If so, that'd be a huge con, as it only capitalizes in IBR once, when you come out of it.
Thanks.
I was planning on doing IBR so that I'd have a relatively low monthly payment ($400-500) while in residency. That way, I'd be able to pay more if I was able, but the minimum payment wouldn't be outrageous.
Thing is, I was speaking to my loan servicer, and that lady actually suggested that I go into "intership-residency forebearance" instead. Her argument was that I would still be able to make payments if I so desired, but that there would be no minimum payment I'd have to make each month, in case money was tight at some point. Now, going into forebearance would certainly drop me out of qualifying for PSLF, but I wasn't too interested in that anyway.
Seems like there should be a downside to doing this, but I haven't been able to come up with the information. Does anyone know if interest capitalizes annually while in forebearance? If so, that'd be a huge con, as it only capitalizes in IBR once, when you come out of it.
Thanks.