Unless you choose one of the six ways to go to medical school for free, chances are you will be financing your medical school education with a combination of loans, scholarships, grants, and private funds. In other words you’re covering the cost of medical school with your own money!
This article focuses on the different types of medical school loans available to you.
For the rundown medical school scholarships and grants, check out Part 3 of this series.
Medical School Loans
The most widely available loans are Stafford loans, Perkins loans, Grad PLUS loan, Private loans, and loans from individual schools (Institutional Loans). Each loan has unique attributes that you need to understand before you sign your name on the dotted line.
The Stafford loan is a fixed-rate loan that comes in multiple forms, each with different terms and conditions. You can get a Stafford Loan directly from the Federal Government (the Direct Stafford Loan), or indirectly through your medical school (the Indirect Stafford loan). Both the Direct Stafford Loan and Indirect Stafford loan allow you to borrow a maximum of $20,500 per year, and $240,000 for your entire medical education.
If you can prove financial need, you may be eligible for the Subsidized Stafford Loan. With this loan, the interest that accrues while you attend medical school and during determent periods is paid for by the government. The Subsidized Stafford Loan is “free money” while you’re enrolled in medical school.
For more information about the Direct, Indirect, Subsidized and Unsubsidized Stafford loans, read: “The Stafford Loans.”
The Perkins loan is a low interest rate (5 percent) loan subsidized by the federal government. The Perkins Loan allows you to borrow up to $6,000 per year, maximum $40,000. This loan is an attractive option because you don’t pay for any interest while you are enrolled, and the interest rate is quite low to begin with (5 percent).
Keep in mind that you can only borrow a total of $40,000 with the Perkins loan, so you will have to find additional loans to pay for expenses the Perkins loan does not cover.
Check out “The Perkins Loan” for more information.
Graduate PLUS Loans
The Graduate PLUS Loans are supplementary loans intended to fill in any financial gaps remaining after you have taken out other loans.
Graduate PLUS Loans can loan to you the cost of your medical school education plus expenses, MINUS other financial aid you have received.
Read “The Graduate PLUS Loans” for more information.
Institutional Loans are loans issued by individual medical schools that aren’t supported or subsidized by the Federal Government.
The terms and conditions for these loans vary from school-to-school, so you will have to personally compare and contrast the terms and conditions to these loans to the more common loans.
You will likely find that these loans are more expensive – higher interest rates and a faster repayment schedule.
If a combination of the above loans doesn’t cover all of your expenses, you can take out a loan from a private bank.
Loans from private banks have varying terms and conditions that you will need to personally research. Like institutional loans, you will likely find that these loans are more expensive – higher interest rates and a faster repayment schedule.
How to get medical school loans
So, how do you actually get the money into your bank account?
First, you need to get accepted to medical school. After you’re accepted, you have to fill out the Free Application For Federal Student Aid (FAFSA).
After you receive the results from your FAFSA, you complete the financial aid application for your medical school.
You will then receive a “financial aid award letter” from your school. This letter tells you what kind of scholarships and loans are available to you. Some students are offered scholarships and loans, but most students are offered only a package of loans.
Using the information from the financial award letter, calculate which combination of loans and scholarships will cover your expenses. Your med school will give you an “estimated expenses” figure to guide your next move.
After you know which assortment of aid you want to use, you fill out the various applications required for each loan and submit the applications.
Fill out the loan applications carefully, send them in, and wait for a response. Now you’re done!
The alternative ways to pay for medical school
There are alternatives you should consider if you don’t want to pay for medical school at all. Check out my free report “How to Go to Medical School For Free” after you become a free member of the INQUARTA Premed Club. You’ll learn what you can do to become a doctor for free, and you’ll receive free admissions guides about the MCAT and other topics.
Much like the different med school loans, each of the six ways to go for free has varying requirements, terms, and conditions. Read “How to Go to Medical School For Free” to learn whether any of these methods appeal to you.