How Do Medical School Loans Work?

[k12123]

I've always been curious about how medical school loans work. I know that one should fill out a FAFSA but from my understanding, it does not cover the entire tuition as an individual is only allowed to loan a relatively small amount for graduate/professional school.

• Would you loan the rest from a private company?
• Do the loans cover rent/food/etc.?
• Do you need someone to cosign with you?
• Do people ever get denied for a loan? I'm concerned because my parents just closed on a property and I'm worried that I might get declined if a cosigner is required.

Thanks!

---

Members don't see this ad.

 

[Prncssbuttercup]

You get loans from the stafford loan program and the grad plus program to cover the full cost of attendance

 

[BB8730]

Federal loans will cover the full cost of attendance (tuition, books, housing, transportation, personal expenses, etc). As Prncss said above, the Stafford loan is the first-line federal loan but it has a limit of $20,500 per year. If you need more than that, you will need to take out a Grad Plus loan, which has a higher interest rate. You can choose to do private loans if you want to, but you don't need to.

Each school sets their cost of attendance and it is usually publicly available (here is my school's). Cost of attendance will cover tuition, books/supplies, housing, food, transportation, personal expenses, and others.

You do not need a cosigner for federal loans nor do you need to enter your parents' financial information on your med school FAFSA. Some scholarships do require parental info though. It's pretty hard (if not impossible?) to get denied federal loans.

 

[k12123]

Wow, thank you so much for the detailed info! This helps immensely!

Federal loans will cover the full cost of attendance (tuition, books, housing, transportation, personal expenses, etc). As Prncss said above, the Stafford loan is the first-line federal loan but it has a limit of $20,500 per year. If you need more than that, you will need to take out a Grad Plus loan, which has a higher interest rate. You can choose to do private loans if you want to, but you don't need to.

Each school sets their cost of attendance and it is usually publicly available (here is my school's). Cost of attendance will cover tuition, books/supplies, housing, food, transportation, personal expenses, and others.

You do not need a cosigner for federal loans nor do you need to enter your parents' financial information on your med school FAFSA. Some scholarships do require parental info though. It's pretty hard (if not impossible?) to get denied federal loans.

 

[Prncssbuttercup]

I think it's impossible, even after bankruptcy you can still get them. There are a few situations that you are unable to take them out, like failure to pay child support, drug convictions, & failure to pay the school loans...

 

[Mad Jack]

I think it's impossible, even after bankruptcy you can still get them. There are a few situations that you are unable to take them out, like failure to pay child support, drug convictions, & failure to pay the school loans...

It is possible if you have outstanding debt that is in collections and you are not making payments on. So long as you are making payments on all of your debt, you can get a grad plus loan.

 

[Prncssbuttercup]

I'm not talking about outstanding debt. I am talking about 1. defaulting on a student loan, until you're current, you cannot take out more. 2. failure to pay child support, if you are behind, whether or not you make payments, you are not eligible to take out loans. 3. drug convictions while on student loans, if you were taking out students loans and have a drug conviction in that time period, you are ineligible for the rest of your life to get student loans from the government.

 

[Prncssbuttercup]

Btw, credit debt, or other loan debt, you can be defaulted on or file bankruptcy and still get student loans. Reason being, you can NEVER get out of paying your student loan debt. The feds will garnish your wages, tax returns, etc until you pay it off...

 

[Seth Joo]

I've always been curious about how medical school loans work. I know that one should fill out a FAFSA but from my understanding, it does not cover the entire tuition as an individual is only allowed to loan a relatively small amount for graduate/professional school.

• Would you loan the rest from a private company?
• Do the loans cover rent/food/etc.?
• Do you need someone to cosign with you?
• Do people ever get denied for a loan? I'm concerned because my parents just closed on a property and I'm worried that I might get declined if a cosigner is required.

Thanks!

Private loans are very hard to get, you need excellent credit these days to get a private medical school loan. Also the Federal Program right now is much better because your interest rates are fixed. Most private loan companies give you a variable APR, so they can change the interest rate whenever they feel like it.

Right now, Federal loans offer income sensitive repayment plans, you won't get that with a loan from a private bank.

Another huge downside here is that you cannot discharge your loans in bankruptcy.

 

[Beargryllz]

company?

• Do the loans cover rent/food/etc.?
• Do you need someone to cosign with you?
• Do people ever get denied for a loan? I'm concerned because my parents just closed on a property and I'm worried that I might get declined if a cosigner is required.

Loans cover tuition and the "cost of living" which accounts for everything else

Nobody cosigns the federal student loan

You *could* get denied a loan but I think the circumstances are pretty dire. I think you have to deal drugs, get arrested, and skip child support payments before you'll get denied a federal student loan.

 

[nm825]

So when you get the loan money for living expenses, does that money just go directly into your checking account? So Touro room and board budget is 20k, if I take out a loan to fully cover COA, I'll just have 20k in my banking account at the start of the semester.

 

[Prncssbuttercup]

Maybe... Take your whole year, subtract tuition & fees, divide in half... That's what you'll get assuming all stuff is split evenly. We get a bit screwed first semester because they take out 100% of our health insurance instead of splitting the bill...

 

[nm825]

Maybe... Take your whole year, subtract tuition & fees, divide in half... That's what you'll get assuming all stuff is split evenly. We get a bit screwed first semester because they take out 100% of our health insurance instead of splitting the bill...

So loans are paid twice per year? When do we get it for first semester? Do we have to have enough saved to cover first month's rent?

 

[Prncssbuttercup]

Loans are dispersed twice per year, generally shortly after your first term starts, and shortly after the second term starts. If you had three terms it would be three times per year. It's really no different than for undergrad work.

 

[hallowmann]

So loans are paid twice per year? When do we get it for first semester? Do we have to have enough saved to cover first month's rent?

Generally speaking, loans are dispersed about 2wks after the semester begins. The loans get sent directly to the school, which takes its cut, them writes you a check for the balance (i.e. the living expenses).

 

[Seth Joo]

Generally speaking, loans are dispersed about 2wks after the semester begins. The loans get sent directly to the school, which takes its cut, them writes you a check for the balance (i.e. the living expenses).

Subsidized Federal Loans are probably the biggest reason why tuition and fees at colleges and universities keep increasing.

Generally speaking, loans are dispersed about 2wks after the semester begins. The loans get sent directly to the school, which takes its cut, them writes you a check for the balance (i.e. the living expenses).

The fact that its so easy to get Federal back loans is the biggest reason why higher education costs keep soaring, faster than the rate of inflation.

Student loans are not a joke, these days its like a mortgage, one that you cannot discharge too.

I believe its going to a point where the student loan program will wind up like sub prime mortgages.

 

[k12123]

I still have Stafford loans from undergrad both subsidized and unsubsidized. Would I have any trouble deferring those loans? I'm going the traditional route so I wouldn't have a gap in between and would not have started paying them.

 

[DoctorKrieger]

I still have Stafford loans from undergrad both subsidized and unsubsidized. Would I have any trouble deferring those loans? I'm going the traditional route so I wouldn't have a gap in between and would not have started started paying them.

Don't worry, you won't have trouble deferring. Uncle Sam wants that sweet, sweet interest.

 

[cakes99]

Don't worry, you won't have trouble deferring. Uncle Sam wants that sweet, sweet interest.

I might end up taking a gap year, does anyone know if I will be able to defer my undergrad unsubsidized loans when I start medical school?

 

[Prncssbuttercup]

Start medical school, yes you can defer. Until medical school starts, you could ask for a forbearance, but they will not be deferred. Deferment is only for in-school status, forbearance is for when you're out of school. You can also do income based repayments before school starts if you have a way to make payments during your gap year.

 

[cabinbuilder]

Be sure you have a clean credit report and nothing in collections - just makes life so much easier. Be sure you have start up money when you move for medical school, as someone else said you don't get your money until 2-3 weeks AFTER classes start so you will need money for your housing, etc. When I was in school we got a check the end of August and the end of January. When I got my check I paid my rent for 6 months, my day care for 6 months, my utilities, and stocked my house with food, dry goods, and supplies from Sam's club (I was use to shopping that way since I grew up in the Alaskan bush and only went to the store every 3-4 months). I still pretty much shop that way since I'm never home for my job.

 

[Prncssbuttercup]

I set up a high-yield savings account and transfer out a set amount each month. Some people do it the way CB does, but Whatever you do, do not leave it all sitting in your checking account and spend it! They won't give you any extra because you didn't budget!!

 

[k12123]

Would my loans from a private company (SallieMae) affect my eligibility for a federal loan? I have about $6,000 on SallieMae and the rest are from Stafford Loans.

 

[Prncssbuttercup]

No. Won't change it a bit

 

[k12123]

Awesome, thanks!

No. Won't change it a bit

 

[cryhavoc]

Every paycheck until you are middle-aged, the prince of darkness crawls out of the ground and devours a small sliver of your soul in an incredibly painful fashion. Or so I am told.

 

[Seth Joo]

Be sure you have a clean credit report and nothing in collections - just makes life so much easier. Be sure you have start up money when you move for medical school, as someone else said you don't get your money until 2-3 weeks AFTER classes start so you will need money for your housing, etc. When I was in school we got a check the end of August and the end of January. When I got my check I paid my rent for 6 months, my day care for 6 months, my utilities, and stocked my house with food, dry goods, and supplies from Sam's club (I was use to shopping that way since I grew up in the Alaskan bush and only went to the store every 3-4 months). I still pretty much shop that way since I'm never home for my job.

That is a very responsible way to use your loan money, a lot of my classmates use their loan money to lease cars they do not need, go on vacations, and other uses.

 

[cabinbuilder]

That is a very responsible way to use your loan money, a lot of my classmates use their loan money to lease cars they do not need, go on vacations, and other uses.

Thanks, I had a family of 4 to feed and didn't want to worry about the basics for all of us.

 

[nontrad78]

Thanks, I had a family of 4 to feed and didn't want to worry about the basics for all of us.

I've only a family of 3, but will be following this model as well. Those are the costs (childcare/school/rent) that on a month to month basis create the most anxiety when things are close. For us anyway.

 

[Seth Joo]

Thanks, I had a family of 4 to feed and didn't want to worry about the basics for all of us.

As it stands in the current system there is no incentive for colleges to contain their costs because of the relative ease of getting student loans via the federal government. It has allowed colleges and universities to increase tuition fees at a much higher rate than the rate of inflation.

There used to be a time when education used to be evaluated as a potential investment, which it still is even in these days.

It does not surprise me when I hear many Gen Yers are living a lot more frugally than previous generations, even home buying is not so common among them, and I think its the weak job prospects for so many combined with the debts that so many now have.

 

[mek117]

What about the federal loan maximum? Financial aid mentioned at my interview that the max you can get from Feds is about 225-250k? In my case I already have 90k in federal loans from grad school w Salliemae (now navient). It makes me nervous that I can only get about 150k more federally when 4yrs tuition will already be at least 120k... And no, I don't plan on doing family practice or military, so i haven't found many other scholarship options (yet).

 

[Prncssbuttercup]

I think that only applies to stafford loans, not to grad plus loans.

 

[Seth Joo]

What about the federal loan maximum? Financial aid mentioned at my interview that the max you can get from Feds is about 225-250k? In my case I already have 90k in federal loans from grad school w Salliemae (now navient). It makes me nervous that I can only get about 150k more federally when 4yrs tuition will already be at least 120k... And no, I don't plan on doing family practice or military, so i haven't found many other scholarship options (yet).

Those are Stafford loans, you also have the Plus loans too. The government will keep increasing the limit so colleges have little incentive to control their costs.

 

[sisko]

I was/am worried about this as well. The federal lifetime loan limit I believe is $224k for med students. Those of you saying that this does not include potential Grad Plus loans -- glad to hear it, I hope you are correct. Unfortunately for me I'm going to have $140k already in outstanding loans from undergrad and grad school. So the remaining Stafford loan availability would probably only get me half way through second year of med school.

I was going to look into the military service commitment after that if need be, but hopefully Grad Plus will be an option as well. It is supposed to be based on credit rating though and is not a sure thing, right? My credit score is bad, have no one who could cosign, and have some credit card debt in collections that realistically will not be paid off before starting med school. So I do worry if I'll have problems there getting Grad Plus loans or private loans.

Then again, giving a loan to a matriculated med student is a pretty safe bet for a lender, especially when that loan persists even if the borrower declared bankruptcy. So maybe there will be money available.

 

[vikingsking82]

Federal loans will cover the full cost of attendance (tuition, books, housing, transportation, personal expenses, etc). As Prncss said above, the Stafford loan is the first-line federal loan but it has a limit of $20,500 per year. If you need more than that, you will need to take out a Grad Plus loan, which has a higher interest rate. You can choose to do private loans if you want to, but you don't need to.

Each school sets their cost of attendance and it is usually publicly available (here is my school's). Cost of attendance will cover tuition, books/supplies, housing, food, transportation, personal expenses, and others.

You do not need a cosigner for federal loans nor do you need to enter your parents' financial information on your med school FAFSA. Some scholarships do require parental info though. It's pretty hard (if not impossible?) to get denied federal loans.

On the website, it states "Medical school and health professions students may borrow up to $40,500 per year and have a cumulative loan limit of up to $224,000" at 6.21% interest. Other people have been saying $20,500 limit, so what is the correct limit and interest rate that you are paying? @Prncssbuttercup

http://www.staffordloan.com/stafford-loan-info/graduate-stafford-loan.php

 

[Prncssbuttercup]

All I can tell you for sure, because without pulling up all my loan documents I don't know 100%, is that I have stafford loans and grad plus loans, and it covers 100% of each year, with no problems. I believe that 224k limit is ONLY for stafford loans, and not grad plus loans, and there is a very high limit (if one at all) for grad plus loans.

 

[vikingsking82]

All I can tell you for sure, because without pulling up all my loan documents I don't know 100%, is that I have stafford loans and grad plus loans, and it covers 100% of each year, with no problems. I believe that 224k limit is ONLY for stafford loans, and not grad plus loans, and there is a very high limit (if one at all) for grad plus loans.

Thanks! My main question now is the $20,500 vs the $40,500 per year limit if you or anybody else happens to know?

 

[BB8730]

Sorry, yeah the 40k per year limit is correct for Stafford loans.

 

[Prncssbuttercup]

Yep, 20 is for UG, 40 for Grad...

 

[Seth Joo]

I was/am worried about this as well. The federal lifetime loan limit I believe is $224k for med students. Those of you saying that this does not include potential Grad Plus loans -- glad to hear it, I hope you are correct. Unfortunately for me I'm going to have $140k already in outstanding loans from undergrad and grad school. So the remaining Stafford loan availability would probably only get me half way through second year of med school.

I was going to look into the military service commitment after that if need be, but hopefully Grad Plus will be an option as well. It is supposed to be based on credit rating though and is not a sure thing, right? My credit score is bad, have no one who could cosign, and have some credit card debt in collections that realistically will not be paid off before starting med school. So I do worry if I'll have problems there getting Grad Plus loans or private loans.

Then again, giving a loan to a matriculated med student is a pretty safe bet for a lender, especially when that loan persists even if the borrower declared bankruptcy. So maybe there will be money available.

Grad Plus loans do a credit check, but its not like a credit check you get when you apply for a credit card or mortgage.

 

[67552931811]

Grad Plus loans do a credit check, but its not like a credit check you get when you apply for a credit card or mortgage.

Any idea how often they deny people? Personally, I don't have 24K laying around in case I get denied....

 

[Seth Joo]

Any idea how often they deny people? Personally, I don't have 24K laying around in case I get denied....

I have no idea, they are easier to get than private loans for sure.

 

[Prncssbuttercup]

I don't know anyone who has ever been denied federal student loans besides the groups I mentioned before. I'm not really sure what your financial situation is, but it is extremely rare for a normal person to be denied student loans for medical school.

 

[Seth Joo]

Any idea how often they deny people? Personally, I don't have 24K laying around in case I get denied....

Getting the money is actually the easy part, the tough part is paying it back.

 

[67552931811]

I don't know anyone who has ever been denied federal student loans besides the groups I mentioned before. I'm not really sure what your financial situation is, but it is extremely rare for a normal person to be denied student loans for medical school.

I figured this much. Just wanted clarity, as I've never used GradPlus loans before.

At any rate, thank you very much .

 

[baxt1412]

From what a financial aid guy at a school told me, they run a credit check, but ad previously mentioned they are just looking for past due accounts I believe. They don't have as much to do with total debt, etx

 

[sisko]

Grad Plus loans do a credit check, but its not like a credit check you get when you apply for a credit card or mortgage.

Hmm sounds good

 

[JPickos9989]

I figured this much. Just wanted clarity, as I've never used GradPlus loans before.

At any rate, thank you very much .

All they are looking for is huge financial red flags, foreclosures, defaults on previous loans, filing for bankruptcy. Even your consumer debt (car loan, store cc's, and other credit cards) has little to no impact if you don't have any collections out on you.

Most people don't get denied grad plus because hopefully we haven't bankrupted ourselves or lost a house in the first 10 or so years of our adult lives, if you have I apologize but I think that takes some serious ignorance to do that so quickly.

 

[67552931811]

All they are looking for is huge financial red flags, foreclosures, defaults on previous loans, filing for bankruptcy. Even your consumer debt (car loan, store cc's, and other credit cards) has little to no impact if you don't have any collections out on you.

Most people don't get denied grad plus because hopefully we haven't bankrupted ourselves or lost a house in the first 10 or so years of our adult lives, if you have I apologize but I think that takes some serious ignorance to do that so quickly.

No no, I haven't done anything like that. Just credit card debt (via interviews and the whole app process). I have never missed a payment, though.

Thanks for the reply, though, Pickleman!