Question about loan deferment

[optimus_prime]

Does anyone have a clear understanding about the steps needed to put our loans into deferment before starting intern year this summer? I was told that this will be somewhat complicated for those of us (the majority, I presume) that consolidated because we have lost our grace period and will be required to make a payment on our consolidated loans in mid-June. Can we apply for the economic hardship deferment before we even have a pay stub to show? I'm not sure how this works and I am concerned about the possibility of my loans going into active repayment. Any clarification would be appreciated.

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[pruritis_ani]

I am wondering about this too. I just consolidated myself, and I will be coming due for a payment around June...now, given what I owe (which actually ain't toooooo bad), there is NO WAY I can afford my loan payment. In fact, even if they cut it to 25%, I still couldn't afford it.

I thought I saw a resident/intern deferment, but it looks like it is only good on loans from before 1993, which doesn't help me at all. So, how do we do this? Is it economic hardship? I have a 4 year residency looming, and will be paying rent and a car payment the whole time....I would like to be able to eat and put gas in my car occasionally as well.

Any help is appreciated!

 

[Methyldopa]

you can apply for economic hardship for Federal Loans, based on your last year's Tax return (since you earned $0, I presume, that should automatically qualify you). this covers you for 3 years, for your 4th year you can either pay or apply for forbearance.

For Private loans usually the grace period is 3 years, with no deferrement (as far as I know) but you can apply for forbearance.

Good luck!

 

[angel80]

We were told that we can't get the economic hardship deferrment until after we file income taxes. We were told to go into forbearance and don't pay any of the interest. After 6 months or so, we can qualify for deferrment. The deferrment will be retroactive, and all of the interest that had accrued on the subsidized loans will be paid by the government.

 

[familyfirst]

Does anyone have a clear understanding about the steps needed to put our loans into deferment before starting intern year this summer? I was told that this will be somewhat complicated for those of us (the majority, I presume) that consolidated because we have lost our grace period and will be required to make a payment on our consolidated loans in mid-June. Can we apply for the economic hardship deferment before we even have a pay stub to show? I'm not sure how this works and I am concerned about the possibility of my loans going into active repayment. Any clarification would be appreciated.

Good that you guys are starting it early. It take 6-9 months to process everything. So you should start now. I can't remember what it was but there is something that you can't do before graduation. So you should get all the paperworks ready and send it in after graduation.

You can qaulify for loan deferement, economic hardship etc...Your new residency program's Graduate Medical Education office will stamp papers for you. Everything should be ok except private loans. Talk to the corporation I mentioned below and ask for info. I used them and don't have to pay anything at all except interests when I choose to. Now some corporations will charge you penalty if you decide to payback as fast as you can later on. The ASLCC doesn't. Anyway, they are excellent and will explain everything to you and no pressure to sign up with them because they are recommended by AAMC. Just gather you info first.

It is American Student Loan Consolidation Corporation (ASLCC). 800-741-4644. My agent was great. She explained everything to me, especially about the making payments (if you choose to), terminology, what other companies are telling you might be false info or tricking you to sign up with them etc...My agent was also very helpful in explaining what loan consolidation might mean to you if you are deciding to buy a house etc... My agent is very tough because she wants you to understand everything so you might think that she is mean but she means well. You don't have to talk to the same agent but my agent is at 727-287-0560 x108, her name is Daryl Laventure. You can speak to anyone at the 800 #.

Good luck. Let me know if it is helpful. I am interested to know myself.

 

[bubblegumbezoar]

Hey guys,

I think that the rules will depend on who your loan is taken out from. For the Direct Loan Borrowers, there is a formula. I'll look for a website for the worksheet which our financial aid guy gave to us at our exit counseling session.

1. Borrower's total monthy payments (GSL, Stafford, SLS, Perkins, PCL, HPSL, LDS, HEAL) amortized over 10 years, Standard (Level) Repayment ___________

2a. Borrower's monthly gross income from all sources (of note, in order to exclude a spouse's income, a W-2 will be necessary rather than a joint tax return as proof of income documentation) _____________

2b. 20% of borrower's monthly gross income from all sources (.20 times 2a above)_______________

3. Does the figure in 1 EQUAL OR EXCEED 2b?_____________________
If the answer is NO, you DO NOT qualify for the economic hardship deferment.
If the answer is YES, continue to number 4.

4. Monthly gross income from all sources minus total monthly__________payments on Federal education loans (2a. minus 1.)

5. Is #4 less than $2420 (YES or NO)?

If the answer is NO, then you DO NOT qualify for the economic hardship deferment.
If the answer ir YES, you MAY qualify for the economic hardship deferment.

Note, the figure $2420 is $3025 for residents of Alaska and $2783 for residents of Hawaii.



Hopefully, that is helpful...I'll look for a link to it.

 

[bubblegumbezoar]

http://www.aamc.org/programs/medloans/update/0204.pdf

Here's the website with the link to this, which is from 2004.

Good luck!

 

[Methyldopa]

We were told that we can't get the economic hardship deferrment until after we file income taxes. We were told to go into forbearance and don't pay any of the interest. After 6 months or so, we can qualify for deferrment. The deferrment will be retroactive, and all of the interest that had accrued on the subsidized loans will be paid by the government.

I haven't heard about this strategy. And I'm unaware of the ability of rescinding forbearance. And I couldn't find anything concerning that. Is this something your school told you?

I would suggest you file taxes before this coming April (ie for tax year 2005) and use a copy of your income tax return to request deferrement.

As far as I understand, the way you report your income is up to you and can be done in either of 2 ways: a) 1/12th of last years gross income as reported on your most recent tax return, OR b) the current monthly gross amount of a borrower's monthly income.

Also you also cannot apply for deferrement until the loans are in repayment.

 

[Methyldopa]

Here is an economic hardship calculator so that you don't have to trouble yourself with using the AAMC worksheet.

https://www.theloanprogram.org/tlc/Calculators/HardshipCalc.aspx

 

[Methyldopa]

Reading up on things, it seems that despite what I wrote most places that you borrowed from want pay stubs AND (not or) your recent tax return (if you filed one).

Here check it out:

http://www.salliemae.com/manage/postecono.html

 

[Idiopathic]

So should we file, since the IRS doesnt require it? And what about Private Loans? SallieMae told me it wouldnt be a problem.

 

[Gut Shot]

Does anyone have a clear understanding about the steps needed to put our loans into deferment before starting intern year this summer? I was told that this will be somewhat complicated for those of us (the majority, I presume) that consolidated because we have lost our grace period and will be required to make a payment on our consolidated loans in mid-June. Can we apply for the economic hardship deferment before we even have a pay stub to show? I'm not sure how this works and I am concerned about the possibility of my loans going into active repayment. Any clarification would be appreciated.

I'm a PGY-1, and we received a 6 month grace period after med school ended. So in November I filed the papers (via my GME office) to qualify for economic hardship deferment. It was granted. When that runs out in three years I'll shift to forbearance.

Unless they have changed things drastically, there's no need to fret about this stuff just yet.

 

[sonso]

I read only a little of this thread before getting a HA.

Greart thread though 👍 , I'm motivated to get on top of this right away.

 

[Methyldopa]

So should we file, since the IRS doesnt require it? And what about Private Loans? SallieMae told me it wouldnt be a problem.

No I don't think you need to file for taxes.

Private loans (I did Medloans) you get a 3 year grace period.


Forbearance bumps up your interest rate, you lose your subsidy, and your interest capatilize after each forbearance period; so it should be a last resort.

If interest check out this website by the AAMC (has a ton of info on loans):

http://www.aamc.org/students/financing/debthelp/start.htm

 

[rxfudd]

When that runs out in three years I'll shift to forbearance.

Just remember that you need to apply for deferment on a yearly basis. They can grant up to three years worth, but it is not a one-shot application. It is not uncommon for people who are in particularly high-paying residencies (i.e. PGY-III at $48K per year) to qualify for two years and have to forbear in their third year.

 

[NinerNiner999]

You should have a 6-month grace period. Wait for a couple of months as send in your two most recent pay stubs for income verification. You will be approved for your intern year at first. Each year thereafer, send in your tax return (because it represents your annual average salary, not your paycheck salary), which will qualify you with a lower income (and secure hardship). Most 3-year programs should be easy to get hardship for using this method...

 

[Methyldopa]

You should have a 6-month grace period.

unless of course you consolidated!

 

[DrRobert]

unless of course you consolidated!

I know. I consolidated in-school and lost the 6-month grace period. I have to call Sallie Mae and see what I can do. I'm supposed to start repayment in June, but I don't have any money to make payments. 👎

 

[G-Man]

I spoke with Sallie Mae today and they said if you already consolidated and will have to pay before residency begins, to call them and they will send a Residency/Fellowship or In-School Deferment Application . As long as your GME office signs it, your O.K.. Not sure who signs if your still in school.

All my loans were with Sallie Mae. My problem is they will only consolidate my Stafford (federal) loans and NOT my Signiture (private) loans. Does anybody know a consolidator who also does private loans?

I have not consolidated yet but plan to in april to lock in a good rate. Should I go with Sallie Mae for federal loans and a different consolidator for private loans OR should I just go with one consolidator for both federal and private loans?

Thanks

 

[zambo]

Can you consolidate private loans (TERI loans)?
If so what's the best way to do it?

 

[familyfirst]

Can you consolidate private loans (TERI loans)?
If so what's the best way to do it?

Just curious if anyone who is looking for a company to consolidate called the corporation I consolidated with, ASLCC??? They explained everything to me about consolidating federal vs. private loans, grace period etc...

Private loan is a whole seperate game from federal loans. I am not sure because I didn't have to worry about it.

You will lose your grace period if you consolidate but the consolidation process takes 3-4 months, you will probably have to pay 1-2 months of repayments beginning of residency. So save a little and you will be ok hopefully by the end of November-December. I think that everything went through by October-November if you start to look now.

I was set on consolidating with Sallie Mae but got a postcard from ASLCC in the mail last minute. I called them and felt the agent really care about me as a client and really try to educate me about the whole loan consolidation process and told me about how it can affect my mortgage etc...So I went with ASLCC. Please let me know if they are helpful to you. Totally not pressure to go with them even if you called. Never hurt to have them calculate your rate and get the application going. As I mentioned above, I think that you can only send in your federal loan consolidation application after your graduation date. But you can get everything else ready.

Good luck. The most helpful suggestion I got last year was start early and don't wait because you will need to probably pay 1-2 months of repayments even if you start everything right away. Also your med school financial office should give you an exit interview and give you a presentation of how to management your debt and what resources to look up for loan consolidation.

 

[PalCareGrl]

I just consolidated with ASLCC and they were fantastic! I called on Monday, had Direct Loans that had to be processes by today and they overnighted my application for me to sign (they filled it in over the phone) and also paid for it to be overnighted back to them. A couple of my classmates went with them last year and were very happy and satisfied (and the people that work there are SOOOOOOOOOOO friendly and helpful - not at all like Sallie Mae). 😀

I did a lot of research before choosing a company and what I learned basically was not to trust Sallie Mae - they lie and use tactics to get you to consolidate with them and advertise incentives you can never get (unless you don't plan on deferring through residency...) All of their incentives (esp. for MedLoan consolidation) only count if you don't apply for economic hardship or deferment... which to me is basically false advertising, cuz I certainly can't afford to make payments of thousands of dollars when I'm in residency.

Just my 2 cents (no pun intended). 😀

 

[familyfirst]

I just consolidated with ASLCC and they were fantastic! I called on Monday, had Direct Loans that had to be processes by today and they overnighted my application for me to sign (they filled it in over the phone) and also paid for it to be overnighted back to them. A couple of my classmates went with them last year and were very happy and satisfied (and the people that work there are SOOOOOOOOOOO friendly and helpful - not at all like Sallie Mae). 😀

I did a lot of research before choosing a company and what I learned basically was not to trust Sallie Mae - they lie and use tactics to get you to consolidate with them and advertise incentives you can never get (unless you don't plan on deferring through residency...) All of their incentives (esp. for MedLoan consolidation) only count if you don't apply for economic hardship or deferment... which to me is basically false advertising, cuz I certainly can't afford to make payments of thousands of dollars when I'm in residency.

Just my 2 cents (no pun intended). 😀

I am happy to hear that ASLCC is the one to go.