REDI Act Proposes Interest-Free Student Loan Deferment for Medical and Dental Residents

The Resident Education Deferred Interest Act, or REDI Act, aims to change the rules for federal student loan payments for doctors and dentists in training. It amends Section 455(f) of the Higher Education Act of 1965 to create a specific type of loan deferment for borrowers completing medical or dental internships or residency programs.

Hitting Pause on Payments (and Interest)

Under this bill, eligible medical and dental interns and residents could pause payments on their federal student loans. Crucially, the REDI Act specifies that during this deferment period, not only are principal payments not required, but interest will not accrue on the loan. This is a significant potential benefit, as interest accumulation during deferment or forbearance periods typically adds substantially to the total amount owed over time. For a resident physician working long hours for relatively low pay compared to their eventual earning potential, pausing payments without interest adding up could provide substantial financial relief.

Easing the Path Through Training

The core change here targets the unique financial pressures faced during the post-graduate training years in medicine and dentistry. These multi-year programs are essential for licensure but often come with demanding schedules and compensation that makes managing significant student loan debt difficult. By preventing interest capitalization during this period, the bill directly addresses the long-term debt burden associated with medical and dental education. This specific provision – stopping interest accrual – differentiates it from some other deferment options where interest might still pile up, even if payments are paused.