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  1. #1
    Slaol's Avatar
    Slaol is offline Elite Member 7164 points
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    News for AUC Students on Financial Aid... US Government brings new repayment program

    Forbes released a story today which discussed a new loan repayment program for those on Federal Student Loans that is supposed to go into effect on July 1st of this year.

    According to the article, students will no longer have to repay loans based on what they owe - but based on how much their income exceeds the US poverty level.

    Under this plan, borrowers' monthly payments will be capped at 15% of the amount by which their income exceeds the federal poverty level (currently $16,245).

    Let's say you have an adjusted gross income of $30,000. That means your pay exceeds the federal poverty level by $13,755 a year, or $1,146.25 a month. Under the new program, you would owe 15% of that amount, or $171.94, per month, regardless of your total outstanding loan balance.

    Grads May Soon Repay Student Loans Based On Income - Forbes.com
    EDIT: According to the article, Medical Students would have a slightly different repayment play - ie: their monthly payments will be a little higher than the figures I posted above. Can any AUC grads in their residency comment on how this compares to the current system?


    The following is from the article:
    Under the income-based plan, doctors and dentists will be required to make small monthly payments during residency if they earn more than $16,245. A resident making $56,000, for instance, would owe $503 per month under the income-based repayment plan.


    Though some medical schools are lobbying Congress to allow residents to defer payments during residency, FinAid's Kantrowitz says that the federal government is unlikely to change the rules.

    "It's very expensive to provide subsidized interest to medical students who don't really need it because they're going to graduate and get very high-paying jobs," he says.

    If a resident can't cover the monthly payments, he can elect to apply for forbearance. Under this program--which lenders are obligated to offer--the resident won't have to make any payments, but the unpaid interest will be added to the principal that the student must start to pay off once the forbearance term ends. Choosing to go into forbearance won't affect a borrower's credit score, but it will mean you will pay more interest.
    Last edited by Slaol; 06-03-2009 at 03:40 PM.
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  2. #11
    Hawkeye13's Avatar
    Hawkeye13 is offline Senior Member 510 points
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    congratulations on your junior member status dw9211
    Last edited by Hawkeye13; 06-04-2009 at 05:08 PM.

  3. #12
    dw9211 is offline Member
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    always one up on me Hawkeye13

  4. #13
    rokshana is offline Member Guru 11646 points
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    Quote Originally Posted by dw9211 View Post
    According to the document above, medical students are no longer going to be able to defer their loans through residency...


    I think it has been a long time since medical students have been able to defer loans during residency. You have to go into forbearance if you are not able to make the loan payment, which most residents can't afford. However, if they start going income based with regards to repayment (and not graded income based that increases every year) that should make it affordable and most of us wouldn't have to go into forbearance during residency. We could just make 200 dollar or so payment.
    uhhhh...wrong...all y loans are deferred currently..

    this is however the last year you can...come july 1st no mas...so if you are or have graduated and want to defer...do it now...even if you have a grace period...that is only 6 month...defer and you have the whole year.

    its sucks overall...while deferment only made a difference with the subsidized loans, every little bit counts...

    i live in an affordable area and i would find it difficult to make the ~ 300/month you would have to pay...much less someone who lives places like NY/NJ...

    however this is not new info...it was announced well over a year ago...
    Endocrinology, Diabetes and Metabolism Attending
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    ds_in_tx is offline Senior Member
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    Quote Originally Posted by rokshana View Post
    this is however the last year you can...come july 1st no mas...so if you are or have graduated and want to defer...do it now...even if you have a grace period...that is only 6 month...defer and you have the whole year...
    At least for Sallie Mae, you have to be out of your 6 month grace period before you can defer, so anyone who graduated after December 2008 is already screwed

  6. #15
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    [quote=dw9211;1111057]
    Quote Originally Posted by Slaol_121 View Post
    According to the document above, medical students are no longer going to be able to defer their loans through residency...


    I think it has been a long time since medical students have been able to defer loans during residency. You have to go into forbearance if you are not able to make the loan payment, which most residents can't afford. However, if they start going income based with regards to repayment (and not graded income based that increases every year) that should make it affordable and most of us wouldn't have to go into forbearance during residency. We could just make 200 dollar or so payment.
    I just graduated and deferred my student loans for the next year. I was told by the loan companies that I could defer for 3 years (gov't pays interest on subsidized loans) and then I could go into forebearance (the interest gets compounded on subsidized loans) for the next 3 years (a total of 6 years), at that point I could considate and continue to forebear or start paying them off. Personally, I am only in a four year residency, so I will defer for three years and the forebear my final year.
    PGY-1 Preliminary Medicine Resident

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    ds_in_tx is offline Senior Member
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    [quote=DRDRWMD;1111727]
    Quote Originally Posted by dw9211 View Post
    I just graduated and deferred my student loans for the next year. I was told by the loan companies that I could defer for 3 years (gov't pays interest on subsidized loans) and then I could go into forebearance (the interest gets compounded on subsidized loans) for the next 3 years (a total of 6 years), at that point I could considate and continue to forebear or start paying them off. Personally, I am only in a four year residency, so I will defer for three years and the forebear my final year.
    The point being, you can't get the Economic Hardship Deferment after July 1 2009; medical graduates will no longer qualify. Meaning that if you want to not pay after your 12 months deferment is up, you will have no other option but to go into forbearance.

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