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

The Resident Education Deferred Interest Act, or REDI Act, is a short but powerful piece of legislation aimed squarely at helping future doctors and dentists manage the massive student loan debt they carry while they are in training. Specifically, Section 2 of the Act creates a brand-new deferment option for anyone serving in a medical or dental internship or residency program.

This isn’t just a pause button on payments; it’s a full financial time-out. While a borrower is in this special deferment period, they don’t have to make any payments on the principal balance of their Federal Family Education Loans (FFEL). The critical part is that interest will not build up on the loan during this time. For anyone who knows how student loan debt works, stopping interest accrual—especially on loans that can easily top six figures—is the biggest win here, preventing that debt from ballooning while they are earning entry-level wages as a resident.

The Real-World Relief: Stopping the Debt Clock

Think about a typical medical school graduate. They often finish school with hundreds of thousands in debt and then enter a residency program where they work 60 to 80 hours a week for a salary that is often surprisingly modest for the cost of living. Under current rules, even if they defer payments, the interest keeps piling up, meaning when they finally finish training and start paying, their balance is much higher than when they started.

The REDI Act changes that equation completely. For these residents, the debt clock literally stops ticking. This provision is designed to override any other part of the Higher Education Act that might normally prevent them from getting this specific benefit. It ensures that the time spent training to become a specialist—which is essential for the healthcare system—doesn’t simultaneously become the period where their student loan debt grows out of control. It’s a direct financial lifeline during the most demanding years of their career.

Who This Helps (And Who Pays)

This measure directly benefits a very specific group: medical and dental interns and residents. By easing the immediate financial burden, the bill makes the demanding residency years slightly more manageable and prevents the interest from capitalizing (being added to the principal balance), which is a major driver of long-term debt.

From a policy perspective, this is a targeted subsidy. The cost of the interest that stops accruing is ultimately borne by the federal government (and thus, taxpayers). However, this is often seen as a necessary investment to ensure that essential healthcare professionals can complete their training without being crushed by debt before they even start their full careers. It’s a clear exchange: financial relief for those who commit to high-demand, high-stress medical and dental training.