Loan Management Options

Loan Repayment Decisions 

If you borrowed loans for medical school, you will need to decide how you want to manage your loans after graduation. You will need to determine if you want to make payments during residency or if you want to postpone payments during residency. Both options are possible, and your decision will be based upon your personal and financial goals.  There is no right way or perfect plan to manage your federal student loans; it’s a decision that can change when your life’s plans and priorities change.

Postponing Payments During Residency

Medical residents may choose to postpone payment on their federal student loans during residency with a mandatory residency forbearance. The servicer is required to grant this forbearance if a borrower requests it. The Mandatory Forbearance Request form can be obtained on the FSA website or by contacting your loan servicer. A mandatory residency forbearance is approved in annual increments so if you want the forbearance to remain in effect throughout residency, you will need to re-submit the request annually. You have the right to switch into--and out of--a mandatory medical residency forbearance at any time.  You can choose to make voluntary payments while enrolled in a mandatory residency forbearance, or you could even choose to pay the loan off early, without a penalty.  If you choose to make voluntary payments, think strategically, and apply the payment to the most expensive loan first.

If you postpone payments with a mandatory residency forbearance but chose to make voluntary payments, your voluntary payments will not count toward Public Service Loan Forgiveness (PSLF) because you will not be enrolled in an eligible repayment plan when participating in a mandatory residency forbearance.

Making Payments During Residency

If you choose to make payments during residency, you will want to think about the repayment plan that best aligns with your personal and financial goals. Understanding the plans will be helpful, so you will want to review the Repayment Plans section of this guide and you will also want to review the repayment scenarios based upon the loans you borrowed, your residency length, household size, and household income.

You can switch repayment plans and adjust your repayment strategy at any time. Contact your loan servicer to discuss how any potential changes you make may impact the total cost of loan repayment. At any time, you may choose to make extra payments, larger payments, or pay the loan off early without a penalty.