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Does anyone know if you have to start paying back federal loans during residency, or afterward?
It's amazing how confident some of you are about issues with which you are so poorly acquainted.
When you graduate, you will most likely (if you are smart) consolidate your federal loans into one giant loan to lock in an interest rate. Depending on the current rate and the amount of Perkins Loans you have, you may choose to leave them separate from this consolidated loan. The majority of large loan corporations (i.e. Sallie Mae) have a medical residency forbearance available, which you have to re-apply for each year, and has a maximum of five years of availability. Depending on your living situation, many residents also qualify for economic hardship deferrment, which is a separate application with specific qualifications.
I haven't paid a dime during residency, but my wife (also an MD) is paying interest on her consolidated loan currently.
yea you would have to pay during residency. residency = job.
so once you finish med school you'll have the 9 month grace period, and boom you gotta start making payments. i'm hoping i get subsidized loans so i don't get shafted by 4 years of interest at x.xx%.
1. You only have to start paying your loans if you don't qualify for economic hardship. The vast majority of residents qualify, so they defer for three years and then enter forbearance for the remainder of residency.
2. Grace periods vary. Mine was 6 months with Direct Loans.
3. I will not pay one dime of my loans prior to having a "real job."
Forbearance is a costly option because it'll hike up interest rates and null any subsidized loans (ie they no longer are subsidized) and interest capitalizes at the end of each forbearance period. Try to avoid that if you can. And don't forget Fellowship deferment.
Forbearance is a costly option because it'll hike up interest rates and null any subsidized loans (ie they no longer are subsidized) and interest capitalizes at the end of each forbearance period. Try to avoid that if you can. And don't forget Fellowship deferment.
Does anyone qualify for forebearance during res? Even if they make a combined income of ~70K?
Though, once they go into repayment, no loan is subsidized.
Working with many going into their first year of residency - here is some good information (some confirming previous comments, and some new information).
1) Apply for Economic Hardship Deferment - Even though you will be working, your debt to income ratio will approve you (especially for the first couple of years). EHD is given in 1 year increments - and you have 3 years max to use it.
Insider information - the way they determine your debt to income - is based on EITHER your a)Current pay stub OR b) PREVIOUS YEAR'S TAX INFO. Most during medical school aren't working -therefore have ZERO income, making you completely eligible for deferment.
2) If your deferment expires or you are no longer eligible and you are still a Medical resident - you are guaranteed a Mandatory Residency Forbearance. You just need to contact your lender let them know that you are still in residency ... that's it!
Utilize deferment first! During deferment you are only accruing interest on UNSUBSIDIZED loans - but during a forbearance - there is interest accruing on the entire balance!
Hope this helps - I can offer more advise - but I think this is getting a bit long winded!
Working with many going into their first year of residency - here is some good information (some confirming previous comments, and some new information).
1) Apply for Economic Hardship Deferment - Even though you will be working, your debt to income ratio will approve you (especially for the first couple of years). EHD is given in 1 year increments - and you have 3 years max to use it.
Insider information - the way they determine your debt to income - is based on EITHER your a)Current pay stub OR b) PREVIOUS YEAR'S TAX INFO. Most during medical school aren't working -therefore have ZERO income, making you completely eligible for deferment.
2) If your deferment expires or you are no longer eligible and you are still a Medical resident - you are guaranteed a Mandatory Residency Forbearance. You just need to contact your lender let them know that you are still in residency ... that's it!
Utilize deferment first! During deferment you are only accruing interest on UNSUBSIDIZED loans - but during a forbearance - there is interest accruing on the entire balance!
Hope this helps - I can offer more advise - but I think this is getting a bit long winded!
During this deferment do your subsidized loans continue to be subsidized or are they racking up interest?
While in an authorized deferment - no interest is accruing on the SUBSIDIZED portion of your loans (even the sub portion of your Consolidation loans). The goverment pays that!
There is no such thing as residency deferment - you have to apply for Economic Hardship Deferment, and while you are in a deferment you are only responsible for the unsubsidized interest.
Yes you can pay more if you so choose it will not affect your status.
Its a great way to keep your unsubsidized capital interest down as well as chipping away at the principle. I wish I had the money to do it!Awesome! Good to know.
That is exactly right - choose deferment first. During a deferment no payment is required - but you can always make payments and it doesn't effect your deferment status. You want to use this when you debt to income allows it - because after your residency your income may not allow you the opportunity to get this subsidized benefit.
Remember - there is no prepayment penalty. And when you aren't required to make payments, be sure you are focusing your funds on paying down whatever your HIGHEST interst rate loan debt is - whether it be credit cards, private loans, or just the 6.8% Staffords. Don't look at loan balances - instead be aware of the interest rate you are paying - this is where so much additional cost comes from.
Good luck!
So during residency when my loans are in deferment, Are we allowed to make payments towards the loan but have the money go toward the principal only (not principal plus interest like the monthly amounts are figured)? I did this once with a car loan....anyone know?
And I'm assuming marital status would affect the ability to qualify for economic hardship deferment.
So during residency when my loans are in deferment, Are we allowed to make payments towards the loan but have the money go toward the principal only (not principal plus interest like the monthly amounts are figured)? I did this once with a car loan....anyone know?
If you know you won't qualify? That is the only reason I could think of.as an upcoming intern is there ANY reason why you would not apply for economic hardship deferment then?
as an upcoming intern is there ANY reason why you would not apply for economic hardship deferment then?