<p>Hi, I have decided to take out a federal subsidized direct loan to finance my undergraduate education. However, I am planning to apply to medical school after completing my undergraduate studies. As a result, I have a couple of questions about loan deferments. I am going to take a year off after finishing my undergrad in order to apply to medical schools. Therefore, will I be able to seek a loan deferment after the 6 month grace period during this year off because I will be unemployed? If I end up getting accepted into medical school, will will my lans be deferred while I attend medical school? Just to make sure, deferment means I will not have to repay the loans and that the loans will not accrue interest during the period if it is subsidized, correct? Thanks for the help.</p>
<p>Bump. Someone please help.</p>
<p>I don’t know about whether you can defer loans during a gap year (you can request it but I don’t know the likelihood of it being approved). While you are in med school they will be deferred.</p>
<p>Stafford loans go into repayment and subsidized ones start incurring interest once you graduate or drop below half time plus a 6 month grace period. If you are out of school for a year but have low or no income, I believe it is possible to defer making repayments on the loan -but once the 6 month grace period is up the interest will start to accrue and will be added to the loan if you do not pay it. Under current rules, if you go back to school the interest will stop accruing on the subsidized loan while you are in school. As you have already used the 6 month grace period the loan will go into repayment and start accruing interest as soon as you finish school (you don’t get an additional grace period on the same loan).</p>
<p>There has been talk about discontinuing subsidies on loans for grad/professional students. Whether that will happn is an unknown right now.</p>
<p>So after the 6 month grace period, If I choose to defer until I finish med school, interest will accrue during that deferment period? I thought subsidized loans do not accrue interest until the repayment period which happens after my deferment period is over.</p>
<p>There are 2 different things. Deferrment and forebearance.</p>
<p>You can only continue to defer the loan once the grace period is over if you meet certain criteria. Things such as being re-enrolled in school or economic hardship. If you meet the federal criteria for economic hardship you can defer, (which would mean interest would not accrue). I don’t know the rules for qualifying for this. I’m not sure if choosing not to work for the year after graduating would make you eligible.</p>
<p>If you don’t meet the criteria for a deferrment, then you can ask for forbearance. Under forbearance you can put off making payments, but interest does accrue.</p>
<p>Thanks for the help :)</p>