REDI Act Waives Interest and Payments on Student Loans for Doctors and Dentists During Residency

The Resident Education Deferred Interest Act, or REDI Act, is zeroing in on the crushing student debt carried by new doctors and dentists. This bill creates a specific, powerful new deferment option for federal student loans specifically for borrowers who are actively participating in a medical or dental internship or residency program.

The Financial Lifeline for Trainees

What does this actually mean? If you’re one of the thousands of doctors or dentists in training—a period notorious for long hours and relatively low pay compared to the debt load—this bill hits the pause button on your loans. Under Section 2, while you are in your residency or internship, you won’t have to make any principal payments. That’s the first part of the relief. The second, and arguably bigger, part is that the interest won’t pile up either. Normally, when you defer or pause loan payments, the interest keeps accruing, and when payments start again, that interest gets capitalized (added to the principal), making your debt even bigger. The REDI Act specifically waives that interest during the training period by amending Section 455(f) of the Higher Education Act.

Why This Matters for Your Wallet

Think about the typical medical school graduate. They often carry hundreds of thousands of dollars in debt. Residency can last anywhere from three to seven years. Without the REDI Act, every month of residency means more interest is added to that massive principal, even if they’re on an income-driven repayment plan. This bill stops that clock. For a resident with $250,000 in debt, waiving interest for four years of training could save them tens of thousands of dollars in interest alone, ensuring that the debt they walk out with is closer to the debt they walked in with. This is a direct financial benefit to the individual, reducing the burden during the years they are working the hardest.

The Real-World Impact

This isn't just a win for the doctors; it’s a win for the system. Residency is essential training, but the financial strain often forces new doctors to make career decisions based on maximizing income to pay off debt, rather than choosing specialties based on need (like primary care or underserved communities). By alleviating the immediate financial pressure and preventing interest from compounding during training, the REDI Act makes the path to becoming a fully licensed doctor or dentist slightly more sustainable. The cost of this benefit, of course, is borne by the federal government and loan servicers, who temporarily lose out on interest payments from this specific group of high-earning potential borrowers, but for the borrower, it’s a significant financial break during a critical time.