A career in medicine is a very prestigious choice, but it can be very expensive as well. The cost of medical school has been rising steadily over the years, and according to the Association of American Medical Colleges (AAMC), the average cost of public institutions for medical studies is $250,222 and $330,180 for private institutions so the only option left is loans for medical school.
That’s not a small amount for students and parents. Fortunately, there are a variety of loans available to help you pay for medical school. In this article, we will be discussing loans specifically for medical school. So if you are a student or parent who is looking for ways to finance a medical education, read on for more information about loans for medical school.
What are medical school loans?
As the name suggests, medical school loans are loans that are specifically designed to help students finance their medical education. These loans can come from a variety of sources, including the federal government, private lenders, and even medical schools themselves.
These loans are a great way to finance your medical education, but it’s important to remember that they will need to be repaid with interest. That being said, medical school loans typically have lower interest rates than other types of student loans, so they can be a good option for borrowers who are looking for a way to finance their education.
Different types of medical student loans
So now that we know, what are medical school loans are, let’s take a look at the different types of medical student loans that are available.
There are mainly two types of student loans
1. Federal student loans
Federal loans or federal aid are funds that are given by the US government to eligible students who require financial assistance for their education. The main types of federal student loans available for medical students are Stafford Loans and Perkins Loans. A federal student aid typically has fixed interest rates and repayment terms.
There are four types of federal loans
1. Direct subsidized loans: These are need-based loans that are available to undergraduate and graduate students. The US government pays the interest on these loans while the student is in school and during any deferment periods.
2. Federal Direct unsubsidized loans: These are not need-based loans and are available to undergraduate, graduate, and professional students. Interest accrues on these loans from the time they are disbursed. This means that the borrower will be responsible for paying the interest even while they are in school.
3. Direct PLUS loans: Direct PLUS loans are unsecured loans that are available to graduate and
professional students, as well as parents of dependent undergraduate students. These loans are for people who still need money to pay for their education after borrowing the most amount of money possible from unsubsidized and subsidized loans. It works as a bridge between the actual cost of attendance and other financial aid the student may be receiving.
4. Direct consolidation loans: Borrowers with multiple federal loans can combine all of their loans into a single loan with a single monthly payment. This is also called refinancing, which can help you save money on interest and get out of debt faster.
2. Private student loans
A private student loan is a loan that is made by a private lender, such as a bank or credit union. Private student loans are not backed by the federal government and typically have variable interest rates. Private loans also tend to have less flexible repayment terms than federal student loans.
A private medical school loan can be used to cover the cost of attendance, including tuition, room and board, books and supplies, and other expenses. Private medical school loans can also be used to consolidate and refinance existing student loan debt.
Most of the time federal loans or scholarships don’t cover the entire cost of medical school. Private medical loans can help you cover the gap between what you have and what you need.
How to apply for a medical student loan?
Applying for medical student loans is similar to applying for other types of student loans. Here’s what you need to do to apply for a medical student loan:
1. Do your research: There are a lot of different lenders out there, so it’s important to do your research and compare your options before you decide on a loan. If you are looking for a private loan, make sure to go online or speak to a financial advisor to compare different lenders.
2. Meet with a financial aid counselor: Once you have been accepted to medical school, you should
meet with a financial aid counselor to discuss your options and create a budget for your education. This will help you determine how much money you need to borrow to cover the cost of attendance.
3. Fill out the Free Application for Federal Student Aid (FAFSA): The FAFSA is the first step in applying for federal student aid. This form will help determine your eligibility for grants, loans, and work-study programs.
You can also apply for private student loans through your chosen lender. The application process for private loans will vary from lender to lender, so it’s important to check with your chosen lender for more information.
4. Wait for the loan approval: Once you have submitted your application, it can take up to several weeks to receive approval for your loan. If you are approved, the lender will send you a loan offer, which will include information on the interest rate, repayment terms, and other important details.
5. Accept the loan and sign the promissory note: Once you have received and reviewed your loan offer, you can choose to accept or decline the loan. If you decide to accept the loan, you will need to sign a promissory note, which is a legal document that obligates you to repay the loan. Make sure to bring someone experienced or someone who knows about the law before signing this document.
6. Start making payments: Once you have signed the promissory note and received your loan funds, you will begin making monthly loan payments. Most medical students will have a grace period of six months after graduation before they are required to begin making repayments.
Top tips for medical students
Here are some tips for students who want to apply for student loans:
1. Start your research early: It’s never too early to start researching your options. The sooner you start, the more time you’ll have to compare your options and find the best loan for you.
2. Compare interest rates and repayment terms: When you’re comparing loans, make sure to compare the interest rates and repayment terms. This will help you find the loan that best suits your needs.
3. Borrow only what you need: Don’t borrow more money than you need. Remember, you’ll have to repay your loans, so only borrow what you need.
4. Go for scholarships first: Scholarships are a great way to pay for medical school without having to take out loans. Make sure to search for scholarships and apply for as many as you can.
5. Create a budget: Before you borrow any money, create a budget for your education. This will help you determine how much money you need to borrow and how much you can afford to repay.
6. Speak to a financial aid counselor: Meeting with a financial aid counselor is a great way to get help with the process of applying for loans. They can help you understand your options and make sure you are borrowing the right amount of money.
So there you have it! In this article, we have shared everything you need to know about loans for medical school. As you can tell by now student loans are very useful tools as long as you handle them responsibly. We hope that this article has given you a better understanding of how student loans work and how to choose the right loan for you. Good luck!