Disclaimer
The following links include some external links provided for informational purposes only. Although sites are evaluated and reviewed, the AMA does not assume responsibility for content of other Web sites.
This site will cover the three major types of financial aid available. Use this information in conjunction with the assistance you can receive at your school's financial aid office.
Loans
Scholarships
Service Commitments
The AMA 's Medical Student Section has published a booklet on Medical Student Financial Aid. Sections of this site are excerpts from this informative booklet.
The Association of American Medical Colleges also has a site with good information on financing medical school.
Accrued Interest
Each day, interest is calculated on the unpaid principal balance of a loan at the prescribed rate outlined in the promissory note, and is added to the principal.
Capitalized Interest
Interest that is added to the principal amount of the loan rather than being paid by the borrower as it is charged.
Consolidation Loan
A loan that combines a number of eligible student loans into one new loan with a fixed interest rate and extended repayment terms—often resulting in significantly lower monthly payments.
Default
Failure to meet the loan terms as outlined in the promissory note.
Deferment
A means through which student loan payments may be temporarily postponed based on certain eligibility criteria. Deferments are generally loan entitlements and are outlined in the promissory note. If your loan is subsidized, the federal government will pay the interest that accrues during a deferment. If it is unsubsidized, you will be responsible for paying the interest that accrues.
EFC
An acronym for Expected Family Contribution. Determined through a “needs analysis” based on information you provide on your FAFSA, your EFC is the contribution you are expected to make towards the cost of your education.
FAFSA
An acronym for Free Application for Federal Student Aid—a form used by the Department of Education and many schools to determine your eligibility for aid.
FFELP (or FFEL)
An acronym for the Federal Family Education Loan Program. The FFELP includes Federal Stafford, PLUS and Consolidation Loans.
Fixed Interest
A set interest rate that does not change during the loan term.
Forbearance
A temporary postponement of full or partial student loan payments. You will still be responsible for interest that accrues on the loan during the forbearance period.
Grace Period
The period of time between a student’s graduation (or separation) from school and when his/her loan repayments begin. Typically, the grace period lasts six to nine months, depending on your loan type.
Grant
Need-based financial aid, often referred to as “gift aid” because it doesn’t have to be repaid.
Guarantee Fee
A fee that is paid to the guarantee agency to insure the loan against default.
Interest
A loan expense charged by the lender and paid by the borrower for the use of borrowed money. The expense is calculated as a percentage of the principal amount (loan amount) borrowed.
Origination Fee
A fee charged to the borrower and typically deducted from the proceeds of a loan before it is disbursed to offset the loan administrative costs.
Principal
The original loan amount borrowed.
Promissory Note
The legal contract between a borrower and lender outlining the terms and conditions of the loan transaction and repayment.
PLUS Loan
An acronym for Parent Loan for Undergraduate Students. These federal loans are available to parents of dependent undergraduate students to help pay up to the total cost of attendance, less any financial aid received by the student.
Scholarships
Financial aid that typically doesn’t have to be repaid. Scholarships may be awarded based on merit, skill, course of study, or occasionally, need.
Servicer
The company that administers your loan and collects payments. The servicer may be different from your lender.
Subsidized Loan
A need-based loan on which the government pays the interest while the student is attending school, during the grace period and during deferment.
Unsubsidized Loan
A loan on which the government does not pay the interest while the student is attending school, during the grace period and during deferment.
Variable Interest
Interest on a loan that fluctuates—generally based on market conditions.
(Source: AMA and CFS, Medical Education Financing and Debt Management)
Resources for financing medical school
The three primary forms of financial aid available to medical students are loans, scholarships, and funds given with a service commitment clause. Numerous sites on the Internet have additional information regarding each of these sources of financial aid.
Loans
There are basically two types of loans available. Federal loans and private loans.
Federal loans
1. Stafford Loans are awarded on the basis of need. The Federal government pays the interest on the loans while you are in school and through the grace period.
2. Federal Perkins Loans are awarded on a needs basis. You have until nine months after graduation to start the repayment process.
3. Loans for Disadvantaged Students (LDS) are low interest loans for students enrolled in medical school who are financially needy and from disadvantaged backgrounds.
(800) 433-3243
Private loans
1. MEDLOANS is a comprehensive loan program designed to provide medical students with access to educational funds under favorable loan terms and conditions.
2. TERI Loans
Loans available to credit worthy students.
3. The Access Group is a nonprofit organization dedicated to providing access to education through affordable school loans.
Scholarships
Many different organizations give out scholarships to students annually. Ask your financial aid office about scholarships that they may administer. Other sources for finding scholarships include the following Web sites that offer search databases.
FinAid is a free public service site with a scholarship database
FastWeb is a free scholarship search database
Other scholarship search databases
The Federal government also has several scholarship programs that are based on the need and for disadvantage students.
(800) 433-3243
Indian Health Service scholarships to American Indian/Alaskan Native
Service Commitments
These programs fund your education with your commitment to serve for a specified number of years in a designated area or organization.
AAMC State and Other Loan Repayment/Forgiveness and Scholarship Programs
Armed Forces and Indian Health Service Health Professions Scholarship Program
These scholarship programs offer full support to medical students in school for exchange in service in the military or with Indian Health Services upon graduation. Contact local recruiters for additional information.
Content provided by: Medical Student Section