Fin Aid for Med School

A couple nights ago, Bob Coughlin, Director of Financial Aid at Harvard Medical School, spoke about the ins and outs of financing a medical education.

He covered a lot of ground, e.g. explaining the differences between subsidized (does not accrue interest while still in school) and unsubsidized loans, how financial aid works for international students, and how family and/or spouse circumstances factor into an aid award.

The following were some of my own take-aways though the talk was certainly more comprehensive:

General info & process

• The median expense estimates for 2008-2009 are $43,360 for a public med school and $62, 243 for a private med school (notice the significant difference).
  
• Generally speaking, the process of applying and submitting paperwork for financial aid happens after being admitted to a medical school.
• Get to know your med school financial aid officer! Med school classes are small so fin aid offices can work more closely with students and their families. If you have unusual circumstances, let the fin aid officer know. There are usually appeals processes.
• There are two types of aid: need-based and merit. Merit aid comes from a med school's institutional funds.
  

Need-based aid

• For federal loans, you would be considered an independent. For institutional funds, you would be considered a dependent and/or your family information is taken into account. This varies school to school but parent information is typically requested even for older students.
• If you are married or will be in the immediate future, a med school will take your spouse's information into account. So they'll look at both your family (i.e. parents) and your spouse.
  
• Med students (U.S citizens/permanent residents) can always get federal loans, e.g. Perkins and Stafford, to cover expenses, regardless of your family situation.
  

Merit aid

• Merit aid is given at the discretion of the medical school and varies considerably from school to school. Such awards are not based on need, i.e. income, assets, etc.
• Admitted students are usually automatically eligible for merit awards so there is no separate process outside of the admissions process.
• It's to your advantage to find outside scholarships. Scholarship money takes away from the need-based aid in a package, meaning that it would typically replace loans (money you would ultimately have to pay back).
  
• Outside scholarships are minimal but can add up. Look to regionally-based scholarships as possible sources.
• Avoid fee-based search services. Instead, use free scholarship search engines (e.g. finaid.org) or simply google search.
  

Aid packages

• The med school aid package looks very different from most college packages: it's common for 3/4 of a med school package to be covered by loans whereas loans for college are usually capped at a much lower amount.
• 87% of 2008 U.S. medical school graduates borrowed money.
• The median public med school debt is $145,000; the median private med school debt is $180,000.
  
• When comparing aid packages from med schools, do not look just at the dollar amounts, i.e. how much grant and how much loan. Scrutinize the details and understand what the debt will look like after medical school and beyond, e.g. subsidized vs. unsubsidized, fixed vs. variable interest rates, etc. Also, consider the cost of living depending on location (e.g. NYC vs. Iowa).
  
• Avoid credit card debt (for med schools reasons but in general too)! Schools cannot factor in this type of debt when putting together your aid package.
• At HMS, all need above $24,500 is covered by scholarship.

International students

• Many medical schools do not consider international students for admission. Those that do may not provide funding (some schools will ask to see up front that you have 4 years of tuition in escrow!). The reason being, international students are not eligible for federal loans so a school would need to use exclusively institutional funds to cover expenses.
• Talk to your home government to ask about possible aid sources.
• The vast majority of med students will not need private loans (vs. institutional or federal loans) though some international students do require these to close the gaps.
  

Odds & ends

• There are few options if any to help students with the costs of flying to medical schools for interviews so it's important for applicants to plan ahead.
  
• However, an AAMC program called FAP (Fee Assistance Program) helps students with need to afford MCAT and AMCAS costs.
• There are several programs that offer medical graduates loan forgiveness in exchange for service, e.g. Public Service Loan Forgiveness and National Health Service Corps.
• Create a budget. Learn more about how you spend your money and where it is going.
• Given the low salaries for medical residents, graduates are not expected to be able to repay loans immediately (meaning loans can be deferred).
• Despite declining salaries, physicians make incomes far above the national average so loans can be repaid!