Private education loans are a real pain.
Interest rate is far higher. Minimal to no safety net/backup options. Maybe you can defer payments for up to a year if you don’t find a job, but you can only do it in short increments and there’s lots of paperwork.
Most concerning is many/most private loans will require repayment once you start residency, and they don’t have IBR/REPAYE. So you’d have large payments to make while in residency.
I believe, but could be mistaken, that mandatory forbearance applies to private loans as well. It’s rarely used nowadays for residents since we have income-based plans, but basically if you ask for a deferment/forbearance your lender is required to give it to you if you’re a resident. At least that was true of federal backed loans (there was a time when not all federal loans were direct loans). It may apply to private education loans as well. Even if a private lender says it does, I’d want to see all that in writing in your actual contract.
However, as someone who took out a private loan for a post bac (which entered repayment while I was in med school) and another for a residency/relocation loan, I will highly recommend avoiding private education loans at all costs. Far less flexibility and protection than federal loans. Not worth it unless you have no other choice (as was my case)
I agree with the above poster it’s odd federal loans won’t cover the full cost of attendance. Typically they can, because there’s no borrowing limit on the PLUS loans, at least to my knowledge.
Give that school a call and ask what’s going on there.
With all that said, my private consolidation loan at 2% over 15 years is phenomenal, and now I make enough money I can just make my monthly payment and not heave to deal with customer service reps…
