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Managing Your Student Loans After Graduation

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Congratulations! You graduated! Now what should you do with your student loans before you start medical school? Depending on your plans for applying to medical school and the type of loans you have, you have options that will fit your needs before, during, and after medical school.

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If you have federal loans, there are few options to consider based on your plans for medical school:

  • If you plan to graduate and move right into medical school, you’ll have a six-month grace period before you are required to make monthly payments. This means it’s likely you wouldn’t make any payments on your outstanding loans. You should know that while you’re not required to make payments during this time, you're still able to do so (and it’s beneficial to you!). Making payments during the grace period will reduce your loan debt prior to entering medical school. Once you’re enrolled in medical school, and as long as you remain enrolled at least half-time, you won’t need to make payments because you would qualify for an in-school deferment.
     
  • If you decide to take a gap year before entering medical school, you would use your six-month grace period and start to repay your loans for the remainder of your gap year.  At this point, making payments may seem difficult, especially if you don’t have a large income; however, there're actually are a number of repayment plans to choose from and it’s likely you will find one that fits your financial situation. For example, there are “traditional” plans such as the Standard Repayment Plan -- where you pay your loan(s) by making the same monthly payment over ten years. But there are also income-driven repayment plans that base your monthly payment on your actual income, which may make your payments easier to manage. These are just a couple of options. Review the FIRST Financial Aid Fact Sheets for more information.
     
  • If you have difficulty making payments, you may qualify for a deferment or forbearance.  These options make it possible to postpone payments. During deferment, although no monthly payment is required, interest will continue to accrue on any unsubsidized loan you have; however, the government pays the interest on subsidized loans.  With a forbearance, the borrower is responsible for interest on all loans, subsidized and unsubsidized. You should be aware that even though you aren’t required to make payments, you can do so, and it would be beneficial to do so as it will save you money in the long run.

If you don’t know who services your loan(s), visit the Federal Student Aid website to look up your servicer(s) contact information. You’ll need this information if you want to request a deferment or forbearance, if you want to make a payment on your loans, or if you want to set up an online account on your servicer’s website

If you have private loans, you’ll need to contact the lender/servicer of your loans to see what options may be available to you.

  • Private loans (as well as institutional loans from your undergraduate program) will not appear on the Federal Student Aid website. Instead, you will need to review your promissory note, contact your school’s financial aid office, or review your credit report for details about your private loan(s). Private loans are different than federal loans, so you may not have all the repayment or postponement options that you have with federal loans. It’s important that you understand your obligations. If you’re unsure, contact the lender of the loan.

Bottom line, you’ll need to manage your loans after graduation. Remember FIRST (Financial Information, Resources, Services, and Tools) is here to help you at any point to make the best financial decisions for your needs.

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