What to Expect After Graduation

Your Loans 

When you graduate, your federal loans will enter a grace period (Direct Unsubsidized Loans) or post-enrollment deferment (Direct PLUS Loan). A grace period and a post-enrollment deferment covers a 6-month period in which no payments are required. 

If you took a leave of absence (LOA) during medical school, the loans disbursed to you prior to the LOA would have used their grace period. Since federal loans only get one grace period, you will need to contact your servicer to make plans for the loans that may not have a grace period; this would apply to loans during medical school, and any loans from undergraduate study that don’t have a grace period. You will either have to select a repayment plan or request a postponement of payment through a deferment or forbearance for any loans that don’t have a remaining grace period or post-enrollment deferment period.

Borrowers can choose to make unscheduled (or voluntary payments) at any time without any penalty – even during a grace period or post-enrollment deferment.

If you make an unscheduled payment, servicers are required to apply those payments like this: 

  1. Apply payment to any outstanding late fees or penalties (if there are any).
  2. Apply payment to any outstanding unpaid interest.
  3. Apply payment to principal once all outstanding interest has been satisfied.

If your servicer allows you to make extra or unscheduled payments from the portal on their website, you may want to consider that option because it will likely give you more control in making sure the payment is applied as intended. If you are sending an unscheduled or voluntary payment to your servicer by check, be sure to explain how you want your payment applied to your loan(s), and then follow up to make sure your directions were followed.