Sorry about not answering this....I must have missed it. If a student doesn't match they have the opportunity to enter the "Scramble" with all of the other students that didn't match nationwide. They compete for the programs that didn't match with a prospective graduate. This year there were about 1438 individuals that didn't match and they were fighting for 145 remaining spots. Everyone that doesn't match originally will get an email 1 hour later that shows the open positions. If you don't get something in the scramble, then yes....you can't do a residency that year but may apply in the future.
I am starting my residency on Monday. I don't know if I will specialize (AKA- trying for a PGY-2) I'm keeping my options open, however, I do know that I want to be in a hospital and on the floors. To do that, you need a residency around here. Let me know if you have any questions!