important question on sallie mae loans in terms of starting rseidency.

[ilovepath]

I have an important question on sallie mae loans in terms of starting rseidency.
I need some guidance with regards to sallie mae and residency. Did they only offer the option of residency forbearance or did they offer a residency deferment option as well? Upon speaking with them/emailing them, they don't seem to offer residency deferments, the only caveat is if you have loans before 1993. Can any residents, that have dealt with sallie mae, and have an idea whether deferments do/don't exist help me out?

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[gutonc]

I have an important question on sallie mae loans in terms of starting rseidency.
I need some guidance with regards to sallie mae and residency. Did they only offer the option of residency forbearance or did they offer a residency deferment option as well? Upon speaking with them/emailing them, they don't seem to offer residency deferments, the only caveat is if you have loans before 1993. Can any residents, that have dealt with sallie mae, and have an idea whether deferments do/don't exist help me out?

None of the Stafford Loan programs (regardless of lender or servicer) have residency deferment anymore. It's forbearance or IBR only at this point. There is still deferment for fellowship (which was likely an oversight in the original law that hasn't been changed yet) and for Perkins and private loans if you have any of those.

 

[ilovepath]

Thanks for the response, I have 2 questions.
My sallie mae loans in specific were between 2003 and 2007. Was there some cutoff line before 2003 that you were able to unitilize a residency deferment?
My second question, is not silly if you want to possibly do multiple fellowships...Are you able to switch from residency forbearance to fellowship deferment if you are saying that it is still a viable option?
Sorry for all the questions but the website, calls, and emails still don't fill me in adequately so I need to solicit antecdotes preferably from residents/fellows etc that have to deal with this.

None of the Stafford Loan programs (regardless of lender or servicer) have residency deferment anymore. It's forbearance or IBR only at this point. There is still deferment for fellowship (which was likely an oversight in the original law that hasn't been changed yet) and for Perkins and private loans if you have any of those.

 

[wuironl]

Options for repayment, deferment, or forebearance will depend on the type of loan. The best way to figure out your options is to ask for copies of the master promissory notes associated with each loan...

 

[ilovepath]

For the most part, (with exception if you borrow private above the government allowable levels) we are all dealing with the same loans during that time period ie. stafford loans through sallie mae, government loans, not private loans.
I am asking for those residents' antecdotes, or someone with sufficient certainty on these policies on deferment or forbearance. Insofar I gather there are no options on deferment and only forbearance available.

 

[gutonc]

For the most part, (with exception if you borrow private above the government allowable levels) we are all dealing with the same loans during that time period ie. stafford loans through sallie mae, government loans, not private loans.
I am asking for those residents' antecdotes, or someone with sufficient certainty on these policies on deferment or forbearance. Insofar I gather there are no options on deferment and only forbearance available.

You are correct. You will soon have a financial aid exit interview (required by law if you received Stafford/Perkins loans) with your financial aid department. Ask them then...or now...if you have more questions.

 

[WholeLottaGame7]

For the most part, (with exception if you borrow private above the government allowable levels) we are all dealing with the same loans during that time period ie. stafford loans through sallie mae, government loans, not private loans.
I am asking for those residents' antecdotes, or someone with sufficient certainty on these policies on deferment or forbearance. Insofar I gather there are no options on deferment and only forbearance available.

You can't do deferment, but if you submitted income taxes for last year (which at least for me was $0 income), you can use that when you apply for IBR and my payments for the first year are $0. That'll change this year, but it is one less year of payments if you're stretched. If I recall there's an option where if you stay in academics and make 120 payments, the rest is forgiven, so it might behoove you to make at least some minimal payments that first year anyway, can't remember for sure if there's a minimum cutoff or not.

 

[blanche]

None of the Stafford Loan programs (regardless of lender or servicer) have residency deferment anymore. It's forbearance or IBR only at this point. There is still deferment for fellowship (which was likely an oversight in the original law that hasn't been changed yet) and for Perkins and private loans if you have any of those.

whoa....is this true?? I start fellowship this summer and that would rock. though if I already had 3 yr of deferment as a resident, wonder if I've used up all of my time anyhow..

 

[ilovepath]

So far you're the only one who seems to have deferment for residency loans. Was your deferment for sallie mae government loans, because based on the responses nobody has been able to do that.
I never had an exit interview.

whoa....is this true?? I start fellowship this summer and that would rock. though if I already had 3 yr of deferment as a resident, wonder if I've used up all of my time anyhow..

 

[ilovepath]

Well the key issue I'm driving at, is if you're in a state of irb, it's essentially like forbearance in that the subsidized loans are no longer subsidized anymore right? That's what I'm trying to determine, that only deferment is where you enjoy that continued subsidized state on your loans, and the only deferment I'm aware of, which doesn't apply to residents, is economic hardship or unemployment. The other that was mentioned was fellowship deferment, which seems really weird that they do that but not residency.

You can't do deferment, but if you submitted income taxes for last year (which at least for me was $0 income), you can use that when you apply for IBR and my payments for the first year are $0. That'll change this year, but it is one less year of payments if you're stretched. If I recall there's an option where if you stay in academics and make 120 payments, the rest is forgiven, so it might behoove you to make at least some minimal payments that first year anyway, can't remember for sure if there's a minimum cutoff or not.

 

[alwaysaangel]

Well the key issue I'm driving at, is if you're in a state of irb, it's essentially like forbearance in that the subsidized loans are no longer subsidized anymore right? That's what I'm trying to determine, that only deferment is where you enjoy that continued subsidized state on your loans, and the only deferment I'm aware of, which doesn't apply to residents, is economic hardship or unemployment. The other that was mentioned was fellowship deferment, which seems really weird that they do that but not residency.

If you pay IBR the government will continue to pay the interest for the subsidized loans for up to 3 years.

 

[TGAmed]

If you pay IBR the government will continue to pay the interest for the subsidized loans for up to 3 years.

I am pretty certain that with IBR your substafford do not continue to be subsidized.

You probably do not qualify for deferrment on your 2003 loans if they were not acquired while in med school. If you were in med school and have done MD-Ph.D., etc, you could look into it but I think people were grandfathered in by graduating class and not by entering class.

You only qualify for IBR until you finish residency,likely, however you will (as the law states now) never be required to pay more per month than you would pay as the flat 10yr payment under the standard repayment plan (~2100/month if you have 163K in debt).

To get the 120 payment forgiveness you have to be paid from a non-profit account...which may or may not be true if you work for a non-profit institution. So you just have to check with whomever you get a job with when your residency is over. Likely your residency qualifies.

And we're all pretty screwed if we make minimum IBR payments during residency and before 10 years is up they cancel the PSLF program without grandfathering us in

is if you're in a state of irb, it's essentially like forbearance in that the subsidized loans are no longer subsidized anymore right?

In IBR you make payments, in forbearance you do not. As I understand it (I might be wrong, but as I said I am pretty sure) your subsidized loans do not continue to be subsidized under either plan. In deferment, your subsidized loans remained so...though in many people's cases I am not sure it made a "huge difference" considering that was "only" 30ishK of the total debt.

 

[ilovepath]

The other thing I looked into when talking with them was graduated payment, ie you only pay interest. They offer this option for 4 yrs--48 months. I think that's a great option.

I guess the bottom line I'm driving at, is for most if not all of us that take out stafford govmnt loans are all not going to be eligible for any type of deferment EXCEPT for fellowship deferment. Essentially as was mentioned, residency deferment does not exist, unless your loans were pre 1993. That's the main thing I wanted confirmed.

 

[alwaysaangel]

I am pretty certain that with IBR your substafford do not continue to be subsidized.

How does IBR treat interest? Does it still accrue?
If your reduced payment under IBR does not cover the interest on your loans, the government will pay that interest on your Subsidized Stafford Loans during your first three years in IBR. After three years, and for all other loan types, the interest will accrue but not compound. That means it will be added to your principal, but interest will continue to accrue only on the original principal amount. Anything you still owe after 25 years of qualifying payments will be forgiven. For more information on this topic, see Question 35 of the Department of Education's IBR Q&A.

http://www.ibrinfo.org/faq.vp.html

 

[blanche]

So far you're the only one who seems to have deferment for residency loans. Was your deferment for sallie mae government loans, because based on the responses nobody has been able to do that.
I never had an exit interview.

I graduated in 2007, had sallie mae Medloans (consolidated staffords only), deferred 2007-10-all three years of residency. Repayment this year while I live the good life. go to fellowship this summer.

I guess I can try calling Sallie. Though getting in touch with someone who knows what they are talking about is based on pure chance/luck...

 

[ilovepath]

Man, that's crazy.
I talked with like 5 different sallie mae reps, tons of previous alumni...all of which tell me its impossible to defer during residency of govmt stafford. Is there something special about your loans different than everyone else's? I almost feel like I want to post the emails to this forum so I can get a concensus if they are intentionally mis-representing their policies. This isn't a small deal...the long term difference between 3 years of deferment and forbearance is a huge deal. Blanche, are you sure you aren't referring to forbearance?

I graduated in 2007, had sallie mae Medloans (consolidated staffords only), deferred 2007-10-all three years of residency. Repayment this year while I live the good life. go to fellowship this summer.

I guess I can try calling Sallie. Though getting in touch with someone who knows what they are talking about is based on pure chance/luck...

 

[ilovepath]

If anyone can confirm or report a story of residency deferment approval or denial this would help me. It's really frustrating talking to half a dozen sallie mae reps saying there's no way for residency deferment unless my loans were pre 1993, unless there's specific conditions blanche can fill me in on, because it seems other residents have hit this brick wall in terms of only being allowed to forbear.

 

[alwaysaangel]

If anyone can confirm or report a story of residency deferment approval or denial this would help me. It's really frustrating talking to half a dozen sallie mae reps saying there's no way for residency deferment unless my loans were pre 1993, unless there's specific conditions blanche can fill me in on, because it seems other residents have hit this brick wall in terms of only being allowed to forbear.

I'm fairly certain Blanche is confusing deferment with forbearance.

There is no in residency deferral anymore. There is forbearance or there is IBR. Unless you had loans before 1993.

You really don't trust Sallie Mae do you? I mean why would you take the word of one random person on the internet over a dozen Sallie Mae representatives?

 

[SeminoleFan3]

I thought until very recently you could defer your student loans while in residency under economic hardship. I remember this was a big deal one of my first few years of med school (2007/2008) and the financial aid folks talked with us about its implications. Therefore, Blanche made have been in residency during the time when you could claim economic hardship.

 

[blanche]

I'm fairly certain Blanche is confusing deferment with forbearance.

There is no in residency deferral anymore. There is forbearance or there is IBR. Unless you had loans before 1993.

You really don't trust Sallie Mae do you? I mean why would you take the word of one random person on the internet over a dozen Sallie Mae representatives?

No, I'm not confusing deferment w/forbearance. I deferred (=no interest on subsidized staffords x 3years, but interest accrues on unsubsidized, and no payments due) between 2007-2010. You're correct, you can NOT do this as a resident anymore.

What I was responding to was gutonc's statement above:
"None of the Stafford Loan programs (regardless of lender or servicer) have residency deferment anymore. It's forbearance or IBR only at this point. There is still deferment for fellowship (which was likely an oversight in the original law that hasn't been changed yet) and for Perkins and private loans if you have any of those. "

I am starting fellowship, therefore am interested in whether or not this is true. It would be surprising, if so.

 

[gutonc]

If anyone can confirm or report a story of residency deferment approval or denial this would help me. It's really frustrating talking to half a dozen sallie mae reps saying there's no way for residency deferment unless my loans were pre 1993, unless there's specific conditions blanche can fill me in on, because it seems other residents have hit this brick wall in terms of only being allowed to forbear.

Everybody but Blanche has given you the right answer on this question which is the same one Sallie Mae gave you. No deferments, only forbearance and (if you're "lucky" that your residency salary is so low that you qualify) economic hardship. But I doubt your salary will be that low.

Once again, I'm going to tell you to go talk to your school's Financial Aid office so you can get some closure for yourself on this issue.

 

[blanche]

Everybody but Blanche has given you the right answer on this question which is the same one Sallie Mae gave you. No deferments, only forbearance and (if you're "lucky" that your residency salary is so low that you qualify) economic hardship. But I doubt your salary will be that low.

Once again, I'm going to tell you to go talk to your school's Financial Aid office so you can get some closure for yourself on this issue.

My answer is correct--in the years I was a resident (07-10) you could defer. NOW, you can not. I agree that if you are entering residency, you can not defer, only forbear.

I'm responding to your statement "There is still deferment for fellowship (which was likely an oversight in the original law that hasn't been changed yet)"

I have never heard of this so would like to know where you got this info?

Sorry, I probably confused people because this is more of a graduating med student thread, and I am a residency grad starting fellowship

 

[ilovepath]

My question--what was the policy change that happened between 2007 to now that changed the policy on deferment v. forberance with residency? I thought the pivotal year was 1993 for loans qualifying for deferment.

My problem is I have mixed reports, and I'm trying to get a clear picture. I would forever hate myself for not taking advantage of the most-incentivized, best terms ie deferment if I had eligibility. So if people can give me the most reliable information, with a possible correction from blanche, that would help me. I can put my mind at ease if I have a unanimous statement from everyone that says: no, your only possible recourse is forbearance, until fellowship, where you can briefly do deferment.
From the documents they forwarded me, you must have loans before 1993. I think if I tried to use their form they would clearly deny it because my loans are clearly 2003-07. I'd wager to say the vast majority of us are working with post 1993 loans. Any confirmation reassures me. If anyone knows a policy change occured between blanche's 07 time and now that would help.

I'm fairly certain Blanche is confusing deferment with forbearance.

There is no in residency deferral anymore. There is forbearance or there is IBR. Unless you had loans before 1993.

You really don't trust Sallie Mae do you? I mean why would you take the word of one random person on the internet over a dozen Sallie Mae representatives?

 

[alwaysaangel]

The law changed in 2007 but due to some of the verbage in promissory notes before 93 those loans had to be an exception. Here is one of the original SDN discussions from when it happened: 206.82.221.135/showthread.php?t=449421 Sorry blanche didnt notice when you were in school. You had excellent timing for starting residency. You arent missing anything ilovepath. For people beginning residency this year: unless youre older than dirt and somehow have loans from before 1993 you have two options: forbear or IBR.

 

[ilovepath]

Well my loans were up to 2007, but I'm not starting residency until now, this year.
Am I still eligible?

The law changed in 2007 but due to some of the verbage in promissory notes before 93 those loans had to be an exception. Here is one of the original SDN discussions from when it happened: 206.82.221.135/showthread.php?t=449421 Sorry blanche didnt notice when you were in school. You had excellent timing for starting residency. You arent missing anything ilovepath. For people beginning residency this year: unless youre older than dirt and somehow have loans from before 1993 you have two options: forbear or IBR.

 

[alwaysaangel]

Well my loans were up to 2007, but I'm not starting residency until now, this year.
Am I still eligible?

NO. Unless your loans are from before 93 or you started residency before the loan was changed in fall of 2007. You are neither of those. You DO NOT qualify. IBR or forbear. Pick one. Or I guess you could stay here asking the same question over and over until you get an answer you like.

 

[ilovepath]

Ok, so I read through, and let me know if I'm interpreting correctly...it doesn't matter when you're loans were (unless you had the remote possibility of pre-1993 loans) you were denied deferments after 2007. That's why I'm confused about blanche being able to get deferments...that it would start in 07 but stop after the law took effect in 07? These darn loan terms are confusing.

The law changed in 2007 but due to some of the verbage in promissory notes before 93 those loans had to be an exception. Here is one of the original SDN discussions from when it happened: 206.82.221.135/showthread.php?t=449421 Sorry blanche didnt notice when you were in school. You had excellent timing for starting residency. You arent missing anything ilovepath. For people beginning residency this year: unless youre older than dirt and somehow have loans from before 1993 you have two options: forbear or IBR.

 

[ilovepath]

Ok, so that's the deal, the policy changed in fall of 2007, and you were effectively grandfathered in all 3 years if you started before fall 2007, I think I understand it now....I apologize for sounding obsessive, I'm not trying to get a different answer. I'm just trying to flush out the details to get a better understanding of why I received conflicting reports on this. I'm happy to bite the bullet and forbear, and then defer in fellowship. I just wanted all the history so I could understand the specifics. The worst thing would be not to take advantage of something because you didn't research enough...
but seeing that the qualifier is that you must start residency before fall 07 rather than have loans before that being the caveat, I can understand now why 07 starting residents were able to defer but I am not able to.

NO. Unless your loans are from before 93 or you started residency before the loan was changed in fall of 2007. You are neither of those. You DO NOT qualify. IBR or forbear. Pick one. Or I guess you could stay here asking the same question over and over until you get an answer you like.

 

[blanche]

Ok, so that's the deal, the policy changed in fall of 2007, and you were effectively grandfathered in all 3 years if you started before fall 2007, I think I understand it now....I apologize for sounding obsessive, I'm not trying to get a different answer. I'm just trying to flush out the details to get a better understanding of why I received conflicting reports on this. I'm happy to bite the bullet and forbear, and then defer in fellowship. I just wanted all the history so I could understand the specifics. The worst thing would be not to take advantage of something because you didn't research enough...
but seeing that the qualifier is that you must start residency before fall 07 rather than have loans before that being the caveat, I can understand now why 07 starting residents were able to defer but I am not able to.

Yes, you got it. IBR or forbear are your options now. I was the last possible year to defer, starting residency in 2007. But you are smart to be sure you look into everything. Missing things/small details can mean thousands of dollars when you are dealing with hundreds of thousands of dollars of loans.

The early 2000s were the good old days loan-wise. You could rely on residency deferment. The interest rates my first years were at an all time low-- 2.8% (increased to 6.8% by 2007) I have 3 years of loans locked in at 3.5% by consolidating in 2006 when the rates started really jumping (had not been fixed). Sigh.

 

[ilovepath]

That to me, is a valuable reason for this forum. Even though I talked to a ton of Sallie Mae reps, none knew, or wanted to divulge the hx of the change in 07, in fact they represented it as there was NEVER the opportunity to defer residency. That was a red flag to me, which was why I solicited antecdotes. The powers that be have a strong incentive to hide any benefits available.
I'm glad I started this, had I not posted, I would've never known about fellowship deferment. Even if I can't reap the 'old days' rewards, I want to go forward with as concrete of a game plan as possible, since I feel sallie mae sometimes tries to mislead you.

Just to check with the wisdom of the forum, I also have private aes loans--if anyone has experience with them, is there residency deferment? Also, do they offer a similar direct deposit incentive to sallie mae? I know sallie knocks .25% off, don't know about aes. I'm clueless about aes in general, so if anyone wants to comment too on them, I highly welcome it.

Yes, you got it. IBR or forbear are your options now. I was the last possible year to defer, starting residency in 2007. But you are smart to be sure you look into everything. Missing things/small details can mean thousands of dollars when you are dealing with hundreds of thousands of dollars of loans.

The early 2000s were the good old days loan-wise. You could rely on residency deferment. The interest rates my first years were at an all time low-- 2.8% (increased to 6.8% by 2007) I have 3 years of loans locked in at 3.5% by consolidating in 2006 when the rates started really jumping (had not been fixed). Sigh.

 

[blanche]

None of the Stafford Loan programs (regardless of lender or servicer) have residency deferment anymore. It's forbearance or IBR only at this point. There is still deferment for fellowship (which was likely an oversight in the original law that hasn't been changed yet) and for Perkins and private loans if you have any of those.

so not to derail the thread since, again, I know most here are starting residency, but I've been on the phone w/SallieMae and the above regarding fellowship deferral is true!

you can still defer as a fellow, meaning you are not required to make payments (but still can, as i likely will do) AND have no interest accrue on subsldized staffords. there is NO time restriction except when your fellowship ends--if you do a ten year fellowship (god help you), you would be eligible all of those years. you are not ineligable if you previously did residency deferral back in the day when it existed.

since this is a residency thread, perhaps i'll start a new one to discuss this

 

[gutonc]

Just to check with the wisdom of the forum, I also have private aes loans--if anyone has experience with them, is there residency deferment? Also, do they offer a similar direct deposit incentive to sallie mae? I know sallie knocks .25% off, don't know about aes. I'm clueless about aes in general, so if anyone wants to comment too on them, I highly welcome it.

Again...probably a good idea to ask them directly...and your financial aid office (seriously...does your school not have one?). But in general, private loans are deferable during residency.

 

[ilovepath]

My situation is unique, I don't have access to a financial aid office..this is not an option for me.. so that's off the table.

Again...probably a good idea to ask them directly...and your financial aid office (seriously...does your school not have one?). But in general, private loans are deferable during residency.

 

[group_theory]

Part of the confusion lies in rules changing throughout time. This post will talk about deferment only, and not forbearance.

The initial medical internship/residency deferment applies to FFEL loans made before July 1, 1993. That deferment option ended (was no longer re-authorized by Congress) but those loans originated before July 1, 1993 were grandfathered in. Most likely this does not apply to any medical student, resident, or fellows.

Since then, residents/fellows were able to take advantage of the 20/220 economic hardship deferment. Economic Hardship Deferment allows the borrower to avoid making payments for up to three years, during which time the federal government will pay the interest on the subsidized portion of federal loans. This option wasn't restricted to just medical residents/fellows but anyone who met the criteria. To qualify for Economic Hardship Deferment, your monthly debt payment must exceed 20% of your income, and your income cannot exceed 220% of the Federal Poverty Level. The 20/220 economic hardship deferment had a 3 year limit.

The College Cost Reduction and Access Act of 2007 (CCRAA) removed the 20/220 economic hardship deferment option. The language of the law states that it was effective October 1, 2007. Fortunately the US Dept of Education allowed the 20/220 economic hardship deferment to remain in place while it issued its final regulations for CCRAA. 20/220 economic hardship deferment ended July 1, 2009.

The new income-based repayment plan (IBR) became effective on July 1, 2009. It sets your monthly payments at 15% of your income that exceeds 150% of the poverty line. The government pays the unpaid interest for up to three years when the monthly payment under IBR is less than the interest that accrues. After that point any unpaid interest is deferred and will be capitalized when the borrower no longer qualifies for IBR.

Perkins loans are not eligible for IRB unless it is part of a consolidated federal loan.

The 20/220 rule and IRB applies to any federal loans made after July 1, 1993.

For any federal loans made after 1993, you still have the option for deferment but only under limited conditions.
1. Student - at least half-time in a post-secondary education program
2. Study in an approved graduate fellowship program or in an approved rehabilitation training program for the disabled
https://www.dl.ed.gov/borrower/Defe...ardName=Graduate Fellowship Program Deferment
3. Unable to find full-time employment (limited to 3 years)
4. Economic hardship (includes Peace Corps Service) if your income is less than 150% of poverty guidelines ($1353/month for a one person) or you are on the state public assistance program.
5. Active Military Duty (and if after Oct 1, 2007, for additional 180 days after demobilization)

Please note that the economic hardship deferment under this current system is different than the 20/220 economic hardship deferment that was elimited on July 1, 2009.

 

[chaosbuzz]

@Grouptheory-thanks for your post. I am starting infectious disease fellowship in July-my loans are all stafford loans and have been in forebearance for 3 years-will I be able to put my loans in deferrment during fellowship and have the interest paid for by the govt?