Trying to navigate our country’s student loan system is literally no one’s idea of a good time. It can seem complicated and nebulous, and it feels like the only thing that anyone ever got from a student loan is a lifetime of debt.
For better or worse, however, student loans are a vital part of paying for medical education. Even if you’re lucky enough to have 100% of the GI Bill, there are still plenty of reasons to consider student loans to fill in the gaps. Remember, you’ll need to cover your pre-reqs or post-bacc program, any special program costs, additional cost of living expenses, and any unexpected personal or family expenses that may arise.
I only had to use student loans to cover my post-bacc, and as a service academy grad having just come out of the Army, I had absolutely no idea what I was doing and certainly didn’t know enough to make educated decisions to get the aid that I needed. What I’d like to cover over the next few posts are the different kinds of loans available to you as a prospective medical student, how much you’re entitled to receive, how and where to apply for loans, how best to utilize your loans, and discuss some strategies to make sure you don’t end up with more debt than you need.
Let’s start with the Federal Student Loans, some of the more readily available financial aid to students.
First thing’s first, what are Federal Student Loans?
Federal Loans are, simply, loans granted to students or their parents by the Federal Government. These should be where you turn first for financial aid, and you can figure out how much you need and how to apply with your school’s financial aid office. Private loans, on the other hand, come from banks and should NEVER be your first choice–I would know, but I’ll share my thoughts on the matter later.
As a medical student (and thus defined as a “graduate student” when applying for loans), the following federal loan programs are available to you:
- Direct Unsubsidized (subset of “Stafford Loans”). Available to any graduate or undergraduate student regardless of overall financial need. Your school will determine how much you can borrow based on demonstrated financial need when you apply for the loan. You may be allowed to borrow up to $20,500 per year. You don’t have to make payments while enrolled in school, but interest DOES accrue during this time.
- Grad PLUS (subset of Direct PLUS loans). Available to students in a degree-seeking program “leading to a graduate or professional degree or certificate.” These loans DO consider your credit history. You can borrow up to the full cost of your school, minus any other financial aid (i.e. from a Direct unsubsidized loan)…this basically means that, after being granted a Direct Unsubsidized Loan, you can use a Grad PLUS loan to fill in the gaps.
How do I apply for a federal loan?
Once you are accepted to your med school of choice (CONGRATS!), the first thing you’ll do is complete the FAFSA application (Free Application For Student Aid).
- For a Direct Unsubsidized loan, your school will use the information from your FAFSA to determine how much you are eligible to receive in a loan. (They may also decide to offer you financial aid or scholarships provided directly by the school). Once this has been determined, the school will send you an offer.
- If you are applying for a Grad PLUS loan, you apply separately and directly on StudentLoans.gov. (You must have completed the FAFSA before you do so).
- Regardless of which combination of loans you need, I HIGHLY recommend speaking to your school’s financial aid office as early as possible. It’s literally their JOB to help you navigate the loan process and ensure that you have what you need to attend their institution.
Will I be able to borrow enough to fully pay for medical school?
Most likely, even if you aren’t able to put any cash forward yourself. As of the time of publication, graduate students may borrow a TOTAL (aggregate) of $138,500 per year to cover tuition, fees, and cost of living. (No more than $65,500 of this may be subsidized loans–anything over this amount will come from Grad PLUS or other federal sources). Just remember, anything you borrow must be paid back, plus interest.
There are a few other federal loan programs that, as a medical student, are not available to you but that I’m including for completeness:
Direct Subsidized (subset of “Stafford Loans”). Available to undergraduate students in an amount determined by one’s school, based on the amount someone actually needs, based on your FAFSA application. Amount borrowed ranges between $5,500 to $12,500 per year, depending on the amount of need the student is determined to have.
Parent PLUS (subset of Direct PLUS loans). A loan offered to the biological or adoptive parent of a dependent undergraduate student. These loans DO take credit history of the parent into consideration. The amount borrowed is up to the total cost of attendance for the school, minus any other aid received (i.e. from a Direct Subsidized loan).
Perkins Loan. A low-interest loan for graduate and undergraduate students with “exceptional financial need” as determined by the school. According to the US Department of Education at the time of publication of this article, “Under federal law, the authority for schools to make new Perkins Loans ended on Sept. 30, 2017, and final disbursements were permitted through June 30, 2018. As a result, students can no longer receive Perkins Loans.”
The Federal Student Aid website has everything you need to know about what loans are available, eligibility, how to apply, loan amounts, interest rates, and more.
StudentLoans.gov –> apply for PLUS loans, complete entrance counseling and loan agreements after being approved for loans, access repayment resources, and more.
FAFSA –> information and application for the Federal Application For Student Aid. The FAFSA is required by most schools upon enrollment to determine your need, if any.