Student Loans and Gap Years: The Importance of “Good Standing”
One of the most important things you can do with your
student loans, not only as a responsible borrower, but also to help protect and
build your credit, is to be sure to keep them in “Good Standing”.
While you are in school, you should be able to defer your
student loans as long as you are enrolled at least half time (as determined by
your institution). But what if you decide to take a gap year before attending
dental school? Do you have student loans from your undergraduate and/or
post-baccalaureate degree that you need to consider? How should you handle them
during the period of time between these programs and when you matriculate into
The following reminders may help:
- Most loans (federal and private) have at least a
6 month window period on them (usually called a “Grace” period) before they
come due. In most cases, you have to use the entire Grace period to lose it, so
for example, if you graduate in May and you matriculate in the fall just a few
months later, your loans will not come due before you are put back into an
In-School Deferment on them when you enroll in dental school. Your Grace period
will then start after you leave dental school.
- If your loans come due before you matriculate
into dental school (for example, if there is at least 6 months or more between
programs), you can work with your loan servicer to either a) begin actively
repaying them under a plan you can afford, until you enroll in dental school or
b) consider postponing your payments through either Deferment or Forbearance,
again, until you enroll in dental school. Your credit is protected under both
of these options.
- For details on repayment programs for federal
loans visit www.studentaid.ed.gov/repay-loans/understand/plans.
- For details on postponement options for federal
loans visit www.studentaid.ed.gov/repay-loans/deferment-forbearance.
- It is extremely important to remain in contact
with your loan servicer(s) during any gap year, especially if you have private
loans, as the terms and conditions of private loans are usually quite different
than those of any federal loans you may have.
One more important reminder: Be sure to pay down any
consumer or other similar obligations you may have prior to entering dental
school. You cannot get financial aid (including loans) to cover consumer
obligations, and you do not want to put yourself in a position starting dental
school where you are carrying non-school related financial expenses that will
cause you budgeting challenges in dental school.