Sponsors (14)
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Makes people doing medical or dental internships or residencies eligible for a special in-school loan deferment so they do not have to make principal payments while training and no interest accrues on their federal loans during that time. The change updates the Higher Education Act to explicitly include internship and residency training as an in-school deferment situation.
Amends paragraph (1) by replacing the phrase 'A borrower' with 'Except as provided in paragraph (6), a borrower', creating an explicit exception for borrowers covered by new paragraph (6).
Modifies paragraph (2)(A): (A) in clause (i) removes a semicolon; (B) strikes the matter following clause (ii); (C) replaces the comma at the end of clause (ii) with '; and'; and (D) adds a new clause (iii) stating the borrower 'is serving in a medical or dental internship or residency program.'
Adds paragraph (6) titled 'Special rule for certain in school deferment' providing that, notwithstanding other provisions of the Act, a borrower described in paragraph (2)(A)(iii) is eligible for a deferment during which periodic installments of principal need not be paid and interest shall not accrue on any loan made to the borrower under this part.
Primary beneficiaries are borrowers who hold covered federal student loans and who are engaged in medical or dental internships or residencies. These trainees will get temporary relief from principal payments and will avoid interest accrual while in approved training, which can reduce overall loan cost during early-career training. The Department of Education and loan servicers must update procedures and systems to accept and process deferment certifications for internship/residency status and to suspend interest and payments appropriately. Medical and dental schools and residency programs may need to provide enrollment or status verification documentation. On the federal side, periods without interest accrual reduce federal loan receipts and could have a modest fiscal cost compared with current rules where interest might otherwise accrue; the change does not create a new spending program but modifies loan terms, so budget offices may update cost estimates. Overall operational complexity is limited: the amendment extends an existing in-school deferment category to a clearly defined group of trainees.
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Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Introduced March 11, 2025 by Jacklyn Sheryl Rosen · Last progress March 11, 2025
REDI Act
Committee on Health, Education, Labor, and Pensions. Hearings held.
Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Introduced in Senate