Student Loans & Financial Aid info

Getting your medical degree can be a costly venture. Luckily, there are many private student loans available to medical students given their earning potential. Equally importantly, the fact that few students leave medical school before getting their MD.

Borrowing limits vary by lender, but most offer up to a full expense less aid, and a full expense can sometimes define rather liberally. Individual lenders set the interest rates but rates often track within a couple of points of the prime rate, and depend on the duration and terms of the medical student loan.

In addition, there are unsubsidized Stafford Loans (Federal Student Loans) available to medical students. This is particularly important since HEAL student loans (Health Education Assistance Loans) are no longer available, having been phased out starting in 1998. Other medical student loans are also available.

Debt from Medical School Loans

Medical student loan debt, especially high interest rate debt, is a growing problem. It was recently reported that over the past two decades, the cost of private medical schools has risen 165% and the cost of public medical schools has gone up 312%. A similar study has found that medical school costs have been increasing at a faster pace than inflation. On average, medical students graduate with about $100,000 in debt.

Compound this with slow physician salary growth, young physicians are faced with increasing difficulty in paying their college student loans and medical student loans.

All medical schools are recognizing this problem. The LCME asks every medical school how they intend to reduce medical debt during their regular re-accreditation process. These medical schools feel pressure to either reduce costs or find creative ways to help students finance their debt.

Trends for college student loans

Nearly 50% of recent college graduates took out college or medical student loans with an average borrowed around $10,000. Until recently, college student loan interest rates ran between 6-8%.

Like any debt, college student loans can influence your credit and your future decisions. Students who borrowed a substantial amount for college (more than $5000) are less likely to pursue higher education. Two ways to reduce the debt burden are:

1) Reduce your monthly payment. Since debt burden is measured by comparing your loan payment to your income, reducing your payment helps your credit evaluation. One of the simplest ways of doing this is through college student loan consolidation.
2) Reduce or eliminate the principal balance. Specific types of loans can sometimes be forgiven by service or other higher education - look into the specific college student loan program you have.

The easiest way to reduce your college student and school loan debt is to consolidate student loans. College school loan consolidation results in lowered debt and payments if the average interest after consolidation is lower than it was before. This is really just refinancing one or a group of federal or private student loans at a lower interest rate. Much like refinancing a mortgage loan at a lower interest rate would reduce monthly payments and the total amount paid.

There are two basic kinds of school loans - private and federal. Federal school loans are almost always at a much lower interest rate than you could get for an unsecured private school loan. Because of the nature of the federal student loans, you should never consolidate both private and federal loans into a single private loan. Only federal loans carry government backing and they can be refinanced at a much lower interest rate than can privately financed school loans. Therefore, when you come to consolidate school loans, do the federal loans together then look at consolidating your private student loans.

Are you having trouble repaying your student loans? Do you have multiple student loans and just cannot keep track of paying all of them on time? Do you wish you could combine all your student loans into one with a low fixed rate interest rate? Well, guess what, you can.

There are many lenders, credit unions and even the federal government that can help students, graduate students, and even parents consolidate their student loans to simplify there debt. There are many student loan consolidation experts willing to guide them through the systematic process of bundling all there student loans into one new student loan to reduce the number of there bills, manage there finances, and get on the fast track to lowering there monthly payments. Read below to find out how a little research on the internet can assist with federal, private, and parent loan consolidations to help you save money!

A federal consolidation loan combines all outstanding student loans into one manageable loan. All federal student loans qualify for student loan consolidation, including: Stafford, PLUS, Perkins, Direct loans, HEAL, SLS, Health Professional Student Loans, NSL and Guaranteed Student loans. Both parent and student borrowers can take out a federal consolidation loan; however, they must consolidate their loans separately. Due to a provision, which took effect on July 1, 2006, married students can no longer combine their loans for consolidation purposes. Each borrower must consolidate there own student loans separately.

Consolidation is only available after loans enter the repayment period or during the grace period. It is no longer possible for students to consolidate while they are enrolled in college. By contrast, parents are allowed to consolidate PLUS loans at any point in time. Borrowers can also consolidate student loans that are in default where repayment arrangements are satisfactory.

Even if parents and students have all of their student loans with one particular lender, they can choose to consolidate their student loans with a different lender. This helps them obtain better savings and a lower rate. A minimum balance for loan consolidation is usually required by a majority of lenders.

Borrowers should consolidate federal and private student loans separately, since federal consolidation offers lower interest rates and greater advantages. The interest rate is computed by averaging the interest rates of the loans to be consolidated and rounding it up to 1/8 of a percent. The interest rate of a consolidated student loan can be as low as 4.5%; it is capped at 8.25%. However, if a borrower extends the loan’s term, the interest amount he will be required to pay over the lifetime of the loan will be higher.

There are no credit checks associated with federal loan consolidation. The repayment period is longer. A federal student loan consolidation usually decreases the amount of the monthly payment, sometimes by as much as 60%, by extending the loan period beyond the standard 10-year repayment plan. The repayment period can range anywhere from 12 to 30 years depending on the size of the loan.

It should be said that student loan borrowers cannot consolidate student loans, both federal and private, into one private consolidation student loan. Borrowers still have a choice among multiple private student loan consolidation options. The principal advantage reaped from private student loan consolidation is receiving a single monthly payment. The monthly payment might also be lower since consolidation resets the student loan period. As with federal consolidation, private consolidation student loans that have a longer repayment period will result in higher total interest paid throughout the student loan’s term. Borrowers should find out whether the private consolidation student loan’s interest rate is variable or fixed, whether there are prepayment penalties, and whether any fees are charged.

Undergraduate scholarships and graduate fellowships are forms of education financial aid that help students pay for their education. Unlike student loans, scholarships and fellowships do not have to be repaid. Hundreds of thousands of scholarships and fellowships from several thousand sponsors are awarded each year.

Generally, scholarships and fellowships are reserved for students with special qualifications, such as academic, athletic or artistic talent. Awards are also available for students who are interested in particular fields of study, who are members of underrepresented groups, who live in certain areas of the country or who demonstrate education financial aid needs.

The best way to search for scholarships and fellowships is to use a personalized search that compares your background with a database of awards. Only those awards that fit your profile are identified as matches.

There are several free scholarship databases available online. With more than 1.5 million scholarships worth more than $3.4 billion most accurate and most frequently updated scholarship database are available online. If you supply an email address, they will notify you when new awards that match your profile are added to the databases. You can even submit an electronic application to some of the scholarships listed online, saving you time and money.

You will probably want to search one of the many free scholarship search sites. It does not take much time to search and it is free. To find small local awards that are not listed in any book or database, look for notices posted on bulletin boards at your school’s guidance office, the public library and outside the education financial aid office at nearby colleges and universities.

You can also search for scholarships using your favorite web search engine by including the word “scholarships” with your search keywords.

College alumni and other private scholarship sponsors occasionally establish scholarships with esoteric eligibility requirements, such as a scholarship for left-handed students. Although there are not many of these unusual scholarships, they often attract a lot of attention because of their slightly offbeat nature.

The most prestigious scholarships and fellowships also attract a lot of attention because they are among the most lucrative and competitive awards. Many colleges also offer full tuition academic scholarships.

Average students often ask whether there are any scholarships available to students who do not have a 4.0 GPA. There are many scholarships for average students that focus on qualities besides academic merit. There are also many community service scholarships.

Do not waste your money on fee-based scholarship matching services. You will not get any better information than you can get from the free services available online.

Scholarships that sound too good to be true probably are. Learn how to recognize and protect yourself from the most common scholarship frauds. The number one tip: If you have to pay money to get money, it is probably a fraud.

It is important to ask the school’s education financial aid office about its outside scholarship policy, since this can affect how much you benefit from winning a scholarship if you are receiving need-based student financial aid.

A portion of your scholarship might be taxable. Usually amounts used for tuition and required fees are tax-free, but you should review the rules to ensure that you report the scholarship correctly.

The most reliable information about the number and amount of scholarships can be found in the National Postsecondary Student Aid Study (NPSAS), a statistically representative survey of undergraduate and graduate students conducted by the National Center for Education Statistics (NCES) at the US Department of Education.

Students who are awarded scholarships often need additional financial aid assistance. You can research your loan options as well on the internet

Eligibility for federal student aid is based on financial need and on several other factors. The financial aid administrator at the college or career school you plan to attend will help to determine your eligibility.

The information you reported on your FAFSA is used to determine your Expected Family Contribution (EFC), which is calculated by a formula established by law. The EFC is not the amount of money that your family must provide. However, you should think of the EFC as an index that colleges and universities use to determine how much financial aid (grants, loans or work-study) you would receive if you were to attend their school. If your EFC is below a certain number, you will be eligible for a Federal Pell Grant that is, if you meet all other eligibility requirements.

You can get worksheets that show how the EFC is calculated by downloading them from there Web site at www.studentaid.ed.gov/pubs. Click on the award year appropriate to you under “EFC Formula.”

The amount of your Pell Grant depends on your EFC, your cost of attendance (which the financial aid administrator at your college, university, or career school will figure out), and your enrollment status (full time, three-quarter time, half time, or less than half time).

For other financial aid programs, the financial aid administrator at your college, university, or career school takes your cost of attendance and then subtracts your EFC, the amount of a Federal Pell Grant you are eligible for, and financial aid you will get from other sources. The result is your remaining financial need:

Cost of Attendance
- EFC
- Federal Pell Grant Eligibility
- Aid From Other Sources
= Remaining Financial Need

If you are attending at least half time, your cost of attendance is the sum of

• your actual tuition and fees (or the school’s average tuition and fees)
• the cost of room and board (or living expenses for students who do not contract with the school for room and board)
• the cost of books, supplies, transportation, loan fees, and miscellaneous expenses (including a reasonable amount for the documented cost of a personal computer)
• an allowance for dependent care
• costs related to a disability
• reasonable costs for eligible study-abroad programs.

Costs unrelated to the completion of a student’s course of study are not included in calculating that student’s cost of attendance.

A financial aid administrator can consider special or unusual circumstances such as unusual medical expenses, tuition expenses, or unemployment and can adjust your cost of attendance or some of the information used to calculate your EFC. The financial aid administrator at your college, university, or career school can also change your status from dependent to independent but only under specific circumstances. Your financial aid administrator can explain these circumstances to you. You will have to provide your college, university, or career school with documentation to justify any change. The decision to change or not to change your dependency status is based on the financial aid administrator’s judgment, and it is final. It cannot be appealed to the U.S. Department of Education.

If you have been thinking of going to college or getting a graduate degree, you may feel intimidated by the costs associated with getting an education. While it seems as though having a degree and making money goes hand in hand, it may be overwhelming to figure out how to pay for college. Luckily, there are many sources and types of educational student loans. Read on and find out which options for education student loans are best for you.

Federal educational student loans are loans given through the United States government. The two main types of federal education student loans are the Federal Family Educational Student Loan Program and the William D. Ford Federal Direct Student Loan Program. Private lenders such as credit unions or banks fund Federal Family Educational Student Loans. Federal Direct Student Loans are funded by the United States government and are sent to your school, which then distributes the money. Both programs are considered Stafford loans, which do have eligibility requirements and repayment options regarding enrollment hours. There are also federal student loan programs for the parents of college or graduate students.

These student loans are given independently of student loans guaranteed by the government. Private educational student loans are funded by non-public institutions such as banks or other companies that specialize in student loans. Your school’s financial aid office may provide you with a list of popular options for private educational student loans. There are also different kinds of student loans available depending on your field of study.

Remember that shopping around for the best educational student loan is like shopping around for a school itself. Just as if you want your university or college to be academically competitive and offer the features, which you find attractive, you want to get a student loan that is the best fit for you, which means finding the best interest rates and most manageable terms.

When figuring out how to fund your education, it is important to weigh options so you choose the means that best fits your budget. If you do not have a great deal of money saved for college or graduate school, one of the most viable options to fund your education is a private student loan. A private student loan is a loan funded by a bank or another institution, such as a credit union or corporation. A private student loan can be awarded to you as a student or to your parents. They can be the primary source of funding your education or they can be used to supplement a scholarship or a federal education loan.

There are a number of places to shop around for private student loans. Use the internet to research this. There are also corporations that specialize in student loans. You can find them with some research as well.

Your school may also provide you a list of companies that you can look into for help funding your education. Remember to be in touch with your university or colleges Financial Aid office so you can be prepared to get a student loan if you need one. Also, remember to shop around for the student loan that is the best fit for you. Comparing interest rates and repayment options can help you plan for your financial future.