Sooner or later, every resident is offered the same deal: pause your student loans while your salary is small. It comes as the mandatory residency forbearance a servicer must grant on request. It sounds responsible. It is usually the most expensive thing you can do.
The balance has been growing since your first day of med school. Graduate loans carry no subsidy, so interest accrues from the day each disburses, through school, grace, and any pause. On the roughly $200,000 median med-school debt, at a grad rate near 8 percent, that is about $16,000 a year: close to $44 a day, paid or not. Four years of school and a few of residency later, you repay well more than you borrowed.
The old fear was capitalization: unpaid interest folding into principal, so you pay interest on your interest. A 2023 rule switched off most of the triggers, including leaving forbearance. A few survive, like consolidating your loans or leaving a deferment. That one makes deferment the worse pause: it accrues the same, earns nothing toward forgiveness, and capitalizes on exit. Forbearance no longer sets off that bomb, but it is still a trap.
Here is the part that stings. Most residencies sit at nonprofit or government hospitals, so most residents already work somewhere that qualifies for Public Service Loan Forgiveness: 120 qualifying payments and the balance is wiped, tax-free. What is missing is the payments. Every paused month does not count, and pushes the tax-free wipe further out. Every month on an income-driven plan counts, even when the payment is tiny.
So the move is the opposite of the instinct: on your federal loans, do not pause. Start paying, barely. An income-driven plan sets the payment from your income: as little as $10 a month in intern year, climbing only as your salary does. Those payments count toward the 120. And the newest plan, RAP, currently does what forbearance never did: when a payment does not cover the month's interest, the government waives the remaining unpaid interest, so the balance stops climbing. A $10 payment that counts, and on RAP holds the balance, beats a $0 pause that grows it and counts for nothing.
Two cautions. Private loans have none of this: no forgiveness, no income-driven plan, no waiver. And the federal math assumes forgiveness is your path. If private practice is the plan and PSLF is not, paying the loans down or refinancing may win, and that is a different letter.
The balance does not pause when you do. The only question is whether it grows inside a plan that is counting, or a pause that is not.