During Residency
Financially, your years of residency will not be your most extravagant or lavish. During this time, not only is it a good idea to continue living within a realistic budget, but it is also a good idea to begin actively managing the repayment of your student loans.
You have many options as you choose the strategy that will best support your financial goals during residency. These options range from postponing payments by using grace, deferment, or forbearance to making affordable payments through one of the repayment plans.
During Your Grace Period
After you leave school, your loans will either enter a grace period or require immediate payment. The grace period is a time when payments aren’t required and occurs automatically on Direct Loans. Unsubsidized and PLUS loans accrue interest during the grace period. The availability and length of a grace period depend on the loan type. If you borrowed a private loan through an outside financial institution, you may be asked to begin repayment right after graduation. Check all your loans to be certain when your payments begin so you aren’t in jeopardy of being delinquent.
Before Repayment Begins
For federal Direct Loans, the repayment will begin after the grace period. The actual repayment start date for loans differs depending on the:
- Loan type.
- Grace period.
- Loan disbursement date.
- Loan servicer.
Some of you may have taken breaks in your education lasting longer than six months. If that’s the case, you may have used your grace period. Check with your loan servicer to be sure when your repayment begins on each loan. Some loans may offer additional options under certain circumstances, so make certain with your servicers what those are, and that they are the best decision for you.
Postponing Loan Repayment
Federal student loan payments are postponed during periods of grace, deferment and/or forbearance. As a resident, if you do not wish to make payments on your loans you are entitled to a mandatory residency forbearance. It’s important to know the difference and which benefits you most.