Medical school is expensive – and that is no secret. Every year, hundreds of aspiring medical practitioners give up their dreams just because they are unable to finance themselves through medical school loans. Every year, the country loses out on countless potential doctors just because they are overwhelmed by the steep price of medical education.
But when there is a will, there is a way.
The majority of those who are dead set on becoming a doctor someday find the solutions to their financial problems. If you are looking for guidance on financing your medical education, then this article is for you.
How to pay for medical school
When you cannot bear the expense of medical school upfront, there are three traditional ways you can go.
- Look for scholarships
- Seek assistance from well-to-do family members
- Apply for medical student loans
You will find plenty of information online on the various scholarships that medical schools offer. For example, AUSOMA has listed every scholarship program that it offers up on its website. Asking rich family members and other benefactors to help you through med school is pretty self explanatory in itself. In this guide, we will elaborate on the third method to finance your medical education – the ever-confusing, seldom clarified medical student loans.
Types of medical student loans
When it comes to medical student loans, you can either borrow the money from the federal government or from private companies. Here, we will discuss the different types of loans that you can apply for.
- Federal Direct Unsubsidized Graduate Loans
Normally, graduate students are eligible for upto $20500 per year in direct, unsubsidized loans from the federal government to pay for their degree. In total, there is a cap of $138500 before you max out your eligibility for these loans.
However, medical school can be much more expensive than other colleges. To offset this imbalance, there is usually a higher limit of these loans for medical students. Get in touch with your medical school’s financial aid office to check the maximum amount that you can borrow. If you are applying at AUSOMA, there is an entire department to facilitate you with financing your education through student loans.
These loans are designed to be low-interest, with student-friendly repayment plans.
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Federal Grad PLUS Loans
If your needs are not met even after maxing out the federal direct unsubsidized loans, you can opt for the federal grad PLUS loans. There is no real limit to these loans, and you can get as much as you need to bridge the gap left by any other financial aid you are already receiving.
These loans will enable you to go to any Aruba medical school of your choice without having to worry about affording tuition. However, these medical student loans have a higher interest-rate and more strict repayment policies.
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Private Medical School Loans
Another option to fund your medical education is to go for private medical student loans. However, you will need to have good credit history and someone to cosign these loans with you to avail this option. The only upside to these loans is that some of the private loans may offer you a lower interest rate than the federal grad PLUS loans discussed above.
Things to consider when choosing medical student loans
Now that you know of the different types of medical student loans available to you, you would be wondering which ones you should apply for. This depends on a number of factors, some of which we have discussed below.
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How much money will you need?
Before choosing which loan program to go for, consider how much you will need to borrow per year. If the amount you need is under $20500 per annum, your needs will be met by the federal direct unsubsidized graduate loans, and you don’t need to turn elsewhere.
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What is the interest on your medical student loans?
In case your tuition costs more than the limit to the direct unsubsidized loans, you will have to look at other loan schemes (mainly the grad PLUS and private loans) to bridge the gap. This is where you need to be extra conscious of the interest rate. The federal grad PLUS loans have a much higher interest rate than many private student loans.
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Do you plan on availing Public Service Loan Forgiveness?
While private student loans offer a lower interest rate than the federal grad PLUS, most of them do not make you eligible for the Public Service Loan Forgiveness program. If this is how you plan to get your loans written off, you should be sticking to the federal direct unsubsidized and grad PLUS loan programs.
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Do your medical student loans offer a deferred payment plan?
Deferred payment plans allow you to graduate without worrying about loan payments. If you do not want to be distracted by financial problems during medical education, it is worth it to ensure that the loan scheme you are applying for offers deferred payments.
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Will you need a Pay As You Earn option to repay your medical student loans?
Finally, before you draw out any student loans, consider your future work plans. Do you want to set up your own practice once you graduate? Or do you wish to join a private-sector job that pays enough for you to not worry about repaying your loans?
If your plans are to set up an individual practice, it is understood that you won’t be making a fortune just starting out. In this case, you may benefit from an income-driven Pay As You Earn loan repayment program. While you can avail this option with all federal loans, you should read the fine print to ensure your private loan scheme offers this as well.
Wrapping it up
While financial concerns are real and legitimate, they should not stop you from following your dream of being a healthcare professional. Once you start looking around, you will find tons of practical solutions to your money problems. So, do your research, reflect on your needs, and then choose the right financial help to help you achieve your goals in life!