Medical School Loans

[ajndersn]

I was just wondering what sources for loans current students are using? I'm guessing Federal Stafford Loans, but I have a concern with those types of loans. With the economy the way it is right now, and with medical students giving back to communities in healthcare, why are the rates so high at 6.8%? With feds continually dropping interest rates in this country right now, why are these rates not falling? One would think that students would get better rates to because they are using money to further their education. I guess it's just some food for thought, but does anyone know any legitimate loans with lower interest rates?

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[MossPoh]

One thing, the feds have cut interest rates about as much as they reasonably can. There isn't much benefit to it right now. Aside from that, the 6.5% or so is about the lowest you'll see now with upwards of 8% being pretty common. If the economy is STILL crappy in 5 or 6 years then we have some issues anyway.

Also, the rates the fed cut are not for loans to individual people. It is " the interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight."

 

[beachblonde]

The standard med school loans are:
Federal subsidized stafford @ $8,500
Federal unsub stafford @ $32,000 6.8% fixed
Federal grad plus for additional $$$$ 8.5% fixed

The problem with private loans (from what I understand) is that if they have a variable rate, you might start out with lower than 6.8% but it could go higher than that, and you're stuck. I doubt you're going to find a fin aid office that will suggest you use private loans in lieu of the federal ones.

Why is it this way? Well, they have the money, so they have the power. At least, fwiw, med students are allowed to borrow a lot more federal unsub stafford than other students.

 

[Deepa100]

Are these loans need based?

 

[wongb18c]

The standard med school loans are:
Federal subsidized stafford @ $8,500
Federal unsub stafford @ $32,000 6.8% fixed
Federal grad plus for additional $$$$ 8.5% fixed

The problem with private loans (from what I understand) is that if they have a variable rate, you might start out with lower than 6.8% but it could go higher than that, and you're stuck. I doubt you're going to find a fin aid office that will suggest you use private loans in lieu of the federal ones.

Why is it this way? Well, they have the money, so they have the power. At least, fwiw, med students are allowed to borrow a lot more federal unsub stafford than other students.

For some schools the tuition and living expenses far exceeds what you can borrow from the federal gov't. For people who fall into this catagory (I'm one of them) what do they do to fill the gap? I'm guessing they still need to resort to private loans? Any suggestions?

And are those values (32000 and 8500) the limit you can borrow from ferderal loans per school year?

 

[beachblonde]

For some schools the tuition and living expenses far exceeds what you can borrow from the federal gov't. For people who fall into this catagory (I'm one of them) what do they do to fill the gap? I'm guessing they still need to resort to private loans? Any suggestions?

And are those values (32000 and 8500) the limit you can borrow from ferderal loans per school year?

I believe that the grad plus loan covers the remainder up to the "cost of attendance" which is budgeted to cover rent, food, books, etc. That's why med schools will quote a $60,000 cost, even though tuition is half that.

I believe the $8,500 + $32,000 are the cap, per year, for federal stafford loans for medical students (the unsub amt is higher med students as opposed to other graduate students).

 

[DrMidlife]

Are these loans need based?

No.

 

[stonewall22]

Stafford loans are MUCH better. I've been looking at private loans recently to see what rates are like at the best interest rate I've seen (even with stellar credit) is 9.5%.

 

[Bleurberry]

Stafford loans are MUCH better. I've been looking at private loans recently to see what rates are like at the best interest rate I've seen (even with stellar credit) is 9.5%.

And lets not forget:

CONSOLIDATION!!!

If you have private loans AND federal loans, you need to have two separate consolidations going on. If you mix private and federal in a consolidation, you make the whole bundle a private cons.
Also, although your base interest rate may increase with said consolidation of federal loans, you extend it out to a 30 year payment plan and get your payments cut almost in half. See what I'm saying? Also, Undergrad. Stafford rates are dropping significantly over the next 5 years, I'm curious to see if graduate staffords follow in 2010 with Obama's administration and new congress in place.


What I'm curious about, and I have my suspicions that the answer is yes:

Are Fed. GRAD Plus loans able to be consolidated WITH staffords?

Anyone who can answer this is awesome.

Cheers

 

[scpod]

I believe that the grad plus loan covers the remainder up to the "cost of attendance" which is budgeted to cover rent, food, books, etc. That's why med schools will quote a $60,000 cost, even though tuition is half that.

I believe the $8,500 + $32,000 are the cap, per year, for federal stafford loans for medical students (the unsub amt is higher med students as opposed to other graduate students).

Note that there are no credit criteria for Stafford loans-- anyone can get them-- but you need decent credit or a co-signer for GradPlus loans. For private loans, you need great credit.

Your federal loans also have options of forebearance or deferment that you probabky won't get with private loans. In addition, federal loans are forgiven in the event you die, sparing your family repayment. And, your federal loans can all be consolidated together with no credit criteria.

The maximums you quoted are for a nine-month school year. If your year is 10, 11, or 12 months the maximum increases by about $2,200/mo.

 

[Bacchus]

Stafford loans are MUCH better. I've been looking at private loans recently to see what rates are like at the best interest rate I've seen (even with stellar credit) is 9.5%.

Thats funny because my private loans are at or below 6%.

 

[Bacchus]

Thats funny because my private loans are at or below 6%.

Make sure also you look into deferment plans coming out of Undergrad. I finally got through to Citi my intentions and they finally sent me a deferment form. Now that I have this in hand I am much, much more relieve than getting told, "You should be able to defer."

 

[Deepa100]

So, can I take a home equity loan and defer it till I get thr' 4 years or does it have to be a govt. loan for us to be able to defer it. Also, which loans allow you to defer till after residency?

 

[Bacchus]

None of the federal. I know Citi allows you to apply for deferment for up to 5 years of residency.

 

[DrMidlife]

So, can I take a home equity loan and defer it till I get thr' 4 years or does it have to be a govt. loan for us to be able to defer it. Also, which loans allow you to defer till after residency?

Only student loans will allow you to defer while you're a student. The mortgage/home equity folks don't care if you're in school.

Do some research on loan deferral during residency, because the "hardship deferral" that allowed residents to defer died in Congress this year. We'll be making student loan payments during residency, most likely.

 

[stonewall22]

Thats funny because my private loans are at or below 6%.

That's true, they were last year (for example, Sally Mae was at 5.1%), but private education loans have dropped by 90% in the past two months and interest rates on those loans gone up.

 

[stonewall22]

So, can I take a home equity loan and defer it till I get thr' 4 years or does it have to be a govt. loan for us to be able to defer it. Also, which loans allow you to defer till after residency?

Sally Mae gives you three years after graduation.

 

[Bacchus]

That's true, they were last year (for example, Sally Mae was at 5.1%), but private education loans have dropped by 90% in the past two months and interest rates on those loans gone up.

Mine are currently at 6% or less. Its cheaper right now (with good credit), in my case, to get private loans, but I highly doubt this is going to stay like this.

 

[stonewall22]

Mine are currently at 6% or less. Its cheaper right now (with good credit), in my case, to get private loans, but I highly doubt this is going to stay like this.

That's impressive...are all your private loans with Citi? I've heard a lot of complaints about Citi, what's been your experience?

 

[beachblonde]

That's true, they were last year (for example, Sally Mae was at 5.1%), but private education loans have dropped by 90% in the past two months and interest rates on those loans gone up.

Good point. Private student loans are getting harder and harder to get. While med students are probably a best-bet option for private companies, it doesn't mean it'll be easy.

And like other posters have said, government loans start repayment during residency. The got rid of the deferrals for people who were calculating repayments as a percentage of income and instead made an income cutoff (which is quite low). The payments start at a little less than $400/month, which is manageable, but sure isn't putting a dent in $200,000 or whatever.

 

[Bacchus]

That's impressive...are all your private loans with Citi? I've heard a lot of complaints about Citi, what's been your experience?

Yep. I haven't had any problems. Thanks mom and dad for cosigning!

 

[punkiedad]

Does anyoine know if the Total Cost of Education for a school can be adjusted upwards if you have higher needs (such as dependants) going into school to allow to borrow more money. Not that I want to borrow more, but with a family, mortgage, etc...I can't see how I could do it on the total cost of education listed on my school's webiste.

Thanks.

 

[scpod]

Does anyoine know if the Total Cost of Education for a school can be adjusted upwards if you have higher needs (such as dependants) going into school to allow to borrow more money. Not that I want to borrow more, but with a family, mortgage, etc...I can't see how I could do it on the total cost of education listed on my school's webiste.

Thanks.

Some, but not all, schools will give adjustments for child care. However, the living expenses are figured for you-- not your spouse. He or she is not included. You'll need private loans or another source of income for that.

 

[stonewall22]

Does anyoine know if the Total Cost of Education for a school can be adjusted upwards if you have higher needs (such as dependants) going into school to allow to borrow more money. Not that I want to borrow more, but with a family, mortgage, etc...I can't see how I could do it on the total cost of education listed on my school's webiste.

Thanks.

The COA isn't adjusted, but what is adjusted is the expected family contribution. For example, just because a school has a COA of $20k doesn't mean you can borrow $20k. If you (or your wife) worked the previous year your expected contribution will probably not be zero. On the flip side, if you have dependents, that also brings down your expected contribution, so in affect you get more than a single student with your identical income would get.

The govt is pretty flexible with expected contribution. For example, living in Denver with a COA of $55k and an income of $45k my expected contribution (with three dependents) is still close to 0, so I certainly get more than a single student making $45k would receive.

 

[scpod]

The COA isn't adjusted, but what is adjusted is the expected family contribution. For example, just because a school has a COA of $20k doesn't mean you can borrow $20k. If you (or your wife) worked the previous year your expected contribution will probably not be zero. On the flip side, if you have dependents, that also brings down your expected contribution, so in affect you get more than a single student with your identical income would get.

The govt is pretty flexible with expected contribution. For example, living in Denver with a COA of $55k and an income of $45k my expected contribution (with three dependents) is still close to 0, so I certainly get more than a single student making $45k would receive.

It's different in medical school. The Expected Family Contribution really makes no difference. Anyone can still borrow the total amount of your COA. Further, some schools DO adjust the COA for childcare expenses. You will have to contact them directly to find out if this is the case.

 

[punkiedad]

It's different in medical school. The Expected Family Contribution really makes no difference. Anyone can still borrow the total amount of your COA. Further, some schools DO adjust the COA for childcare expenses. You will have to contact them directly to find out if this is the case.

This is pretty much what I thought...right now I am going through the application process for the military HPSP and will call the fin aid office form my school to see what they say.

Either way, I will make it work. I just don't want my family to suffer more than necessary while I am in school.

Thanks again for the great feedback

 

[AmyWho]

I am a permanent resident and I don't know anyone that would be willing to co-sign private loans for me. So am I eligible to borrow fed loans and if yes, do I have to have someone to co-sign for me since I am not US citizen? Thank you.

 

[Deepa100]

I am a permanent resident and I don't know anyone that would be willing to co-sign private loans for me. So am I eligible to borrow fed loans and if yes, do I have to have someone to co-sign for me since I am not US citizen? Thank you.

My guess is (it is a guess), you could probably et the fed loans.

 

[Deepa100]

So, if these govt. loans are not need-based and can be deferred till graduation, why would any one not take these loans?

 

[jburwell]

does anyone know how much sallie mae loans will give and how much they will cover for rent/living expenses?

 

[DrMidlife]

does anyone know how much sallie mae loans will give and how much they will cover for rent/living expenses?

Schools determine your cost of attendance, which includes a budget for rent etc. This differs by school - rent is more expensive in NY than in KY, for example. If you use loans to cover your cost of attendance, then federal loan programs cover the whole thing (subsidized Stafford, unsubsidized Stafford, GradPlus). You can use Sallie Mae, or somebody else, as the lender who facilitates these loans. If you need to borrow more than the cost of attendance, then there are private loans.

 

[Bacchus]

If you qualify for them, you take them. The Stafford's will cover upto ~42,000 depending on institution. After that you can apply for the Federal Grad Plus Loan, but this is dependent on your credit score and you must also qualify for this loan as well.

 

[axebjc]

I am a permanent resident and I don't know anyone that would be willing to co-sign private loans for me. So am I eligible to borrow fed loans and if yes, do I have to have someone to co-sign for me since I am not US citizen? Thank you.

There is a student in my class who is a permanent resident and he had to take out all private loans. I don't know how it all worked out for him, but I do know he was not eligible for fed loans.

 

[Altruist]

I am a permanent resident and I don't know anyone that would be willing to co-sign private loans for me. So am I eligible to borrow fed loans and if yes, do I have to have someone to co-sign for me since I am not US citizen? Thank you.

From http://www.salliemae.com/get_studen...ad/med_school_loans/med-school-stafford-loan/ :

"You must be a U.S. citizen or non-citizen permanent resident."

I'd say you're a go for federal loans. You shouldn't require a co-sign except if your credit score is bad and you need the Grad PLUS loans. Stafford loans max out at $224,000 total or 40,500/year (excess is meant to cover any stafford loans you have from undergrad).