Hello,
I have 320 k at 5.8% in SAVE plan on forbearnace on nelnet.
Going to residency in July 2027 for 4 years. Expect to make 60k a year.
Have 150k in savings from working for several years.
I would like to keep cash on hand during residency.
I calculated that my interests will balloon if I keep not paying to 420 k at the end of residency.
Will it capitalize if my IBR/PAYE/ICR/RAP payments are under the monthly accrual of 1400 in interest per month?
I think RAP waives the remainder but I am uncertain? What about the other plans?
Dentist going to residency expecting big income decrease
byu/Puzzleheaded-Try-924 inStudentLoans
Posted by Puzzleheaded-Try-924
1 Comment
Your interest would only capitalize if you get an IBR and then leave IBR, or fail to recertify your income while on IBR, or if your income later becomes high enough to hit the standard cap while on IBR.
It does not capitalize when leaving SAVE or PAYE or ICR or RAP.
RAP would waive any monthly accrued interest not covered by your minimum payment.
IBR offers an interest subsidy as well, but it is only for the first three years on the plan and only for subsidized loans.