The FAFSA is basically your application for federal aid. The results of your application get forwarded to the schools you name on it. From there, the schools look at what their current "budget" for students is (tuition, fees, books, room & board allowance, etc.) and send you a letter saying, "Here's how much we're willing to let you borrow." The letter (which is ironically, in my mind, called an award letter - we award you the ability to go in debt!) shows the amount you can borrow, minus any scholarships they offer you. From there it's up to you to pick which lender you want to use.
You can go with anyone from your personal bank (if they're part of the Stafford loan program) to some uber bank on the east coast. Just as a personal aside, I went with the Medloans No-Fees option. It allowed me to borrow the full amount without paying a 3% fee up front. The repayment terms aren't as attractive as other standard Stafford loans, but I felt like I'd rather take a "loss" later rather than up front, especially if I can manage to pay it off on an accelerated basis. There are lots of options out there, and it is a daunting task. I think I spent about a month looking over options and exploring how different repayment schemes would affect my bottom line.
Here are a couple of interesting links:
First-Year Medical School Costs
MEDLOANS Information For information specific to you, click the link for 06-07.
Scanning the new information I'm reminded that things have changed as far as federal funding of education goes. The interest rates are no longer based on the T-bill rate. They are pegged at 6.8% for life. While this is currently kind of a raw deal considering the interest rate was lower before the change, it does protect us from the developing trend of higher interest rates; previously, they couldn't go higher than 8.5%. Also, it looks like the origination fee has gone down from 3% to 2%. This has always varied from lender to lender, but it's still worth noting.
Just get out there and read whatever you can and talk to the folks at Financial Aid. Don't get too stressed about it, though. You are required to do "entrance counseling" through the financial aid department prior to matriculation, which has the possibility of curing some confusion.
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Anyway, good luck and post if you've got more questions.