Federal Loan Repayment
Before you leave medical school, you are required to participate in exit counseling where you and your financial aid counselor will review your rights and responsibilities toward your student loan obligation.
You will also be presented with the various types of repayment plans available to you. Typically, repayment begins after a six-month grace period proceeds any deferment or forbearance options. Below is a brief overview of those options.
Standard Plan
- Monthly payments are a fixed amount for the entire repayment term.
- Payment amounts are determined based on the total amount borrowed.
- Standard repayment term is ten years (see extended repayment).
- Total amount repaid is less than both the graduated and income sensitive plans.
Graduated Plan
- Payments begin in a smaller amount (but are never below the monthly accrued interest amount) and increase over the repayment period.
- Standard repayment term is ten years (see extended repayment).
- May be a good option if you expect your salary to increase over time.
- Repayment totals under this plan are generally larger than what the standard would have been.
Income Sensitive/Contingent Plan
- Payment amounts are adjusted annually based upon your monthly gross income.
- Monthly payment amounts will not be less than monthly accrued interest.
- Interest-only payments are available for up to five years.
- Standard repayment term is ten years (see extended repayment).
- Repayment totals under this plan are generally larger than what the standard would have been.
Income-Based Repayment Plan (IBR)
- Payment amounts are adjusted annually based upon your adjusted gross income and family size.
- Initial payments may be smaller than other repayment plans.
- May have loan forgiveness options after 25 years.
Pay As You Earn (PAYE)
- For Federal Direct Loans only.
- For new borrowers on or after Oct. 1, 2007.
- Payment amounts are adjusted annually based upon your adjusted gross income and family size.
- Initial payments may be less than monthly interest accrual.
- Loan forgiveness options after 20 years.
Revised Pay As You Earn (REPAYE)
- Available for Direct Loans only.
- Payment amounts are adjusted annually based upon your adjusted gross income and family size.
- Spousal income and loans are considered regardless of tax filing status.
- Initial payments may be lower than monthly interest accrual however, payments can also be larger than the standard ten-year amount.
- Loan forgiveness is available after 20 years if you do not have graduate loan debt. If you have graduate loan debt forgiveness is available after 25 years.
- Payments are eligible for Public Service Loan Forgiveness.
Extended Repayment
- Must have borrowed $30,000 or more in student loans.
- Maximum repayment term of 25 years.
- Payments can be either standard or graduated.
- Must have borrowed student loans after October of 1998.
Repayment Strategies
You can develop repayment strategies to minimize the total amount of interest paid over the life of your loans. You do not have to use the same repayment plan on every loan in your portfolio.
For example, you may choose to use a for loans with a lower interest rate while choosing the for loans with a higher interest rate. This would allow you to pay the minimum on the lower interest rate loans and put more money toward the higher interest rate loans.
Or, you may choose to combine an interest payment and participation in a loan repayment program, providing you with a lower monthly payment requirement and making large lump sum payments to your outstanding loan principal. This will lower your overall loan obligations.
Find an option that works best for you and create a strategy for repayment that allows you to repay your student loan obligation and reach your other financial goals.
To help you build a strategy for repayment, use the following links to estimate your monthly repayment amounts and evaluate the different repayment plans:
If you would like to discuss your repayment options and get an in-depth projection of your student loans, contact our office at 314-977-9840 or sfp@slu.edu to schedule a personal appointment.
Federal Loan Consolidation
You can extend repayment for up to 25 years without consolidating but it may be an option to consider if you are interested in the Public Service Loan Forgiveness Program and in other situations. Find more information at . If you have questions about loan consolidation, contact the Student Financial Services Office at 314-977-9840 or sfp@slu.edu.