Debt Management & Financial Wellness
Vanderbilt University is now providing an optional free tool called GradReady which includes information for managing tuition, budgets, and bills. Once on their site, you will need to create an account. This account provides access to this financial wellness tool while you’re a student, and after you leave Vanderbilt. It is designed to help you understand your financial aid and manage your finances. The tool offers three paths: Path 1 — Paying for College, Path 2 — Money Management, and Path 3 — Real-World Finance.
MD Students have another tool available to them for use for financial wellness. AAMC’s FIRST (Financial Information, Resources, Services, and Tools) provides information about how to pay for medical school, manage your finances during medical school, or determine your loan repayment options after medical school. Students in the MD program may sign up for a free account to start building their financial futures!
The Federal Direct Graduate PLUS Loan and private loans require a credit check. It is important to maintain credit worthiness in order to qualify for borrowing needed for your medical education as well as in future years. Having good credit is also vital to many of life’s most important purchases, including financing a home or car, and some employers will not offer jobs to candidates with poor credit. It is recommended that you request a copy of your credit report from a credit bureau to make sure there are no problems. You may request a free credit report at www.annualcreditreport.com. It’s smart to check all three reports at least annually, because they may have slightly different data. Changes you don’t expect or did not authorize can tip you off to a mistake or to identity theft.
The National Student Loan Data System (NSLDS) is the U.S. Department of Education’s online database for federal student loan borrowers. NSLDS receives data from schools, loan guaranty agencies, the Direct Loan program, and other Department of ED programs. This web-based resource provides you with access to the details (loan type, loan servicer, disbursement dates, loan balances and repayment dates) of your federal loans.
Private or Institutional Loans
NSLDS is for federal loans only. To find out the details of other education loans, you will want to review your credit report, reach out to the lender of the loan, or the school where you borrowed the funding.
Grace Period, Loan Deferment, and Forbearance
A 6-month grace period is applied automatically to Direct Loans at graduation. During this time, no payments are required, although you may make voluntary payments at any time. During grace, subsidized loans remain interest-free because the government continues to pay the interest, and unsubsidized and Graduate PLUS loans continue to accrue interest because the borrower is responsible for the accruing interest.
After a grace period has been exhausted, a deferment may be another option to delay making payments on your student loans. Deferments are usually granted in 12-month increments. The most common deferments are enrollment at least half-time at an eligible college, enrollment in an approved graduate fellowship program, or service in the military. If you had previous loans as an undergraduate or graduate student, Vanderbilt University will report your enrollment here to the National Student Clearinghouse and typically no forms are required.
You may request a forbearance on your loan if you are temporarily unable to make your scheduled monthly loan payments due to financial difficulties, medical expenses, change in employment or other reasons acceptable to your loan servicer. You also may be eligible for mandatory forbearance if you are serving in a medical or dental internship or residency program, the total amount you owe each month for all loans is 20% or more of your total monthly gross income, you are serving in an AmeriCorps position, or you are a member of the National Guard. Contact your loan servicer for more information or paperwork to complete.
Loan Repayment Plans
Traditional repayment and income-driven repayment plans are offered to graduates. Standard, extended and graduated repayment plans are all traditional plans that will have a higher monthly payment in comparison to the income-driven repayment plans. With traditional repayment plans, the borrower’s monthly payment is based on the term of the loan and the amount of debt. Within the traditional plans, the most aggressive plan is likely the standard plan. This option requires the borrower to repay the full loan in 10 years and the monthly payment is based on the total amount of debt.
If you want to minimize your monthly payments, you may want to select one of the income-driven repayment plans. These plans include income-contingent repayment, income-based repayment, pay as your earn (PAYE) and revised pay as you earn (REPAYE). These plans may offer more affordable monthly payments because they limit the monthly payment to 10-20% of your discretionary income. The lower the monthly payment, the longer it may take to repay the debt. More time in repayment allows for more interest to accrue, which can result in higher total cost. Borrowers can always choose to make larger payments, without a penalty, and can ultimately determine the length of time to pay off their loans.
To see monthly payments, interest costs, and potential forgiveness amounts based on actual loan debt, MD students should access the MedLoans Organizer and Calculator. Other School of Medicine students should access the Repayment Estimator.
Federal Consolidation Loans allow borrowers to combine all federal student loans into a single loan and extend repayment for up to 25 years. Federal Consolidation Loans have one fixed-interest rate based on a weighted average of the current rates on your existing loans. Applications are made through studentaid.gov. There are pros and cons to consolidation; review the differences carefully.
MD Loan Repayment/Forgiveness Programs
Are you an MD student interested in a service career, or wanting to reduce medical school debt by working in the public service or the military? Good news – there are numerous possibilities available. Financial benefits and requirements vary. Various states offer forgiveness programs.
Public Service Loan Forgiveness
If you are employed by a government or not-for-profit organization, you may be able to receive loan forgiveness under the Public Service Loan Forgiveness Program (PSLF). PSLF forgives the remaining balance on your Federal Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer. For questions on PSLF, contact FedLoanServicing at 1-855-265-4038.