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Federal Student Loan Consolidation Program or Private Loan Consolidation Program is specifically to help graduates better manage their student loan payments, particularly in the early years as they begin their careers. Medical students usually consolidate around the time they finish school, particularly during periods of rising interest rates, and concurrently apply for deferment or forbearance of their consolidation loan payments during residency. Medical student are generally eligible for deferment or forbearance for two to three years for residency training. During periods of deferment or forbearance, the medical student is not required to make loan payments but the interest due is added to the principal balance of the loan.
Consolidation Benefits
By consolidating their federal loans, medical students can combine their multiple federal student loans into one federal loan with a single monthly payment and lock in a single, historically-low fixed rate on their loans (currently as low 4.75%, and the fixed rate can drop even lower to 3.5%, after taking into account additional benefits offered by many consolidation lenders).
With a consolidation loan, medical students can also reduce their monthly payments by hundreds of dollars a month by extending the repayment term to up to 30 years (the repayment term on federal Stafford loans is 10 years).
Students can also choose from various "graduated" repayment plans that reduce monthly payments even further in the early years of the loan.
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