Ask Terry Questions Medical Student Loans

Medical Student Loans

By Terry Savage on December 12, 2023 | College Savings / Student Loans

My daughter is a 2nd year medical student & accruing student loans at an alarming rate. She recently heard about a SAVE plan “loophole.” Direct Plus loans accumulate interest while in-school. But with the SAVE repayment plan, interest does NOT accumulate during repayment. And if one doesn’t have income, loan payments under SAVE are not required. If she was to opt-out of in-school status on Direct PLUS loans and enter repayment voluntarily then in theory she would have no loan payments to make and would not accrue interest. Since rates are over 8% this could add up to a lot. It seems to good to be true and I’m investigating for her but can’t really find anything about it.

Terry Says

Yes, all of that is true. I wrote a column about the new SAVE plan last summer.
You can read it here.
Effectively interest does not accrue on the balance — even if you are not repaying the loan because you have no income. But regarding opting out of in-school status, the devil is in the details. Please consult Rae Kaplan the student loan repayment expert at

And, I’m sure that Rae will advise that at sometime in the future, she may be eligible for Public Service Loan Forgiveness.



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