Financial Aid

6 months after graduation or withdrawal from the University with the option to capitalize accrued in-school interest (add it to the total amount borrowed) or to begin interest payments while in school

Payment amounts will generally be equal throughout the term of the loan which is 10-years. The Standard plan requires higher monthly payments, but results in lower interest costs. Standard Repayment is the plan that allows borrowers to pay education debt in the most aggressive least costly manner.

If you fail to notify your servicer otherwise, the Standard Repayment plan is the default plan for loan repayment.

Best Option For: Borrowers whose primary goal is to minimize the repayment time period and the total interest cost of their student loan debt.

Extended Repayment

The Extended Repayment plan allows you to stretch your current repayment term to up to 25 years (lowering the required monthly payment amount). The qualifications for Extended Repayment include:

• You must have an outstanding balance of principal and interest totaling more than $30,000 in either Federal Family Education Loans or Direct Loans
• All loans must have been issued on or after October 7, 1998

Before opting to extend your repayment term, consider the degree to which this option will negatively impact the overall interest cost of your debt.

Best Option For: Borrowers seeking to lower their monthly payment
(without consolidating).

The Graduated Repayment plan allows you to begin with smaller monthly payments that will be scheduled to increase one or more times during your repayment term. Often, the amount of the required payment in this plan is equal to the amount of interest accruing each month, making it potentially an interest-only payment.

Though Graduated Repayment offers monthly payments that are initially lower than Standard Repayment, it may lead to higher interest costs over the life of the loan because the principal of the loan is not paid off as quickly.

Best Option For: Borrowers seeking temporary relief from high loan payments but expecting an increase in their income in the next few years.

When you select Income-Sensitive (FFEL option) or Income-Contingent (DL option) as a repayment plan, you must provide documentation of your expected income – the monthly payment amount will be based on a percentage of the expected total gross monthly income received from all sources.

This plan must be reapplied for each year and income documentation will be required. If this plan does not meet your needs, Income-Based Repayment may offer additional flexibility with lower payment amounts.

Best Option For: Borrowers that have a lower income, or are experiencing a financial hardship, and need assistance making their monthly payment.

This is the plan that many medical residents consider during residency because it offers several appealing features:

1. This plan often offers the lowest required monthly payment (comparatively)
2. There is a partial subsidy available on the subsidized loans
3. This plan is acceptable under Public Service Loan Forgiveness

The Income-Based Repayment (IBR) plan was designed specifically to help those experiencing “a partial financial hardship” (PFH), by capping the monthly payment at 15%of discretionary income (see the example below). Once you no longer demonstrate a PFH, the maximum required monthly payment amount under IBR may not exceed what the standard 10-year repayment amount is based on the loan balance at repayment or at the start of making www.aamc.org/FIRST
20 IBR payments. In other words, under IBR even when your income goes up, your required payment amount cannot be more than the Standard Repayment amount.

Under IBR, the monthly payment will be adjusted each year according to changes in your income and family size. IBR also offers a partial interest subsidy during the first 3 years. During this period, any accruing interest on your subsidized loans that is not covered by your scheduled monthly payment will be paid by the federal government. You may choose to remain in IBR for the maximum 25 years, at the end of which, any remaining federal loan balance will be discharged/forgiven – though, after 25-years in IBR, it is most likely that a physician will have already repaid their student loans in full. For more information, visit www.IBRinfo.org.

Best Option For: Borrowers who need a lower monthly payment. This option works well for residents, those pursuing careers in public service or anyone that has a lower income and needs assistance in making their monthly payments.