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Loan Deferment, Forbearance, and Repayment Options

As part of the VCOM Financial Aid Counseling Program, students are given the opportunity to attend sessions (group and individual) throughout their time at VCOM during which their educational debt load and repayment options during residency and beyond are discussed. Each year there is also special Exit Counseling for members of the graduating class; during these sessions the various repayment options are explained and assistance is given in applying for these.

Deferment:

During a deferment the government allows borrowers to postpone repaying the principal of their loans for a specific period of time. For Subsidized Stafford Loans (and any subsidized loans which are part of a consolidation loan), no interest accrues during a deferment period because the federal government pays the interest. For Unsubsidized Stafford and Graduate PLUS loans, the interest still accrues during a deferment period. Interest payments on these loans can be postponed by capitalizing the interest (adding all the accrued interest to the loan principal at the end of a deferment) which will of course increase the size of the loan.
Deferments such as the In-School Deferment must be applied for and required documentation submitted to support the application. If a loan has gone into repayment, the borrower must continue making payments until s/he is officially notified that the deferment has been granted.

Forbearance:

During forbearance borrowers are allowed to postpone or reduce payments; however interest continues to accrue even on Subsidized Stafford loans. Forbearances are typically granted in 12 month intervals for up to 3 years. They are granted in cases of extreme financial hardship or other unusual circumstances when the borrower does not qualify for a deferment. Forbearance is a guaranteed option for federal student loans while enrolled in a residency program.
Again, forbearance must be applied for and require documentation be submitted to support the application. If a loan has gone into repayment, the borrower must continue making payments until s/he is officially notified that the forbearance request has been granted.

Income-Based Repayment Plan:

The amount of the monthly payment is based on income and family size. The repayment time can be extended up to 25 years. After 25 years of payments, the remaining loan balance can be eligible for forgiveness if all other requirements have been met.

Standard Repayment Plan:

A fixed payment is made each month until the loan is paid off. The payment amount is based on the loan balance amortized over a period of 10 years.

Public Service Loan Forgiveness Program:

After 120 payments (approximately 10 years if paid monthly), employment with a qualifying employer such as a state or federal agency, the military, or any 501 (C) (3) agency, the remaining loan balance can be eligible for forgiveness if all other requirements have been met.
For more information about educational loan repayment, go to:
www.studentaid.ed.gov
www.finaid.org/calculators