Financing Med School

<p>If DD doesn't get any new lower cost in-state offers, it'll cost about $80K/year, which we are very fortunate we can afford to pay if it is absolutely needed. I'm trying to get some realistic calculators and plans on different options for paying for med school.</p>

<p>The question is, from considerations other than making a 21-year-old be responsible for her expenses (a different debate altogether), does it make sense to pay it up-front or take loans. If the latter, what are the different options? Assuming she doesn't stop at a primary care residency, how does it affect the equation? </p>

<p>I'm familiar with several smaller communities locally where the hospitals have absorbed a part of the loan for each year of service, so there may be a case for having some debt to negotiate with. However, I'm not sure how widespread this practice is and how much it will restrict her future options.</p>

<p>So before next summer, I'd like to sit with her with a few drafts, and decide on the best way to plan the next several years, and more importantly, get her to become financially more literate as the digits and commas she deals with increase. What are your thoughts?</p>

<p>How's your house mortgage situation? Refinancing at 3.5-4% could hardly be beat, I would think. Or do it half this way, and half with her taking the loans?</p>

<p>Dad<em>of</em>3, resident doctors get paid for their time, they don't have to pay tuition, so you only need to consider the 4 years of medical school. My nephew is currently a family doctor third year resident doctor at a hospital that pays him and gives him free housing. Not all residents get the free housing but they may get a higher salary for not getting the housing.</p>

<p>My nephew has accepted a position at a hospital for next summer after he graduates residency that will pay a part of his loans. I <em>think</em> a certain percentage is forgiven for every year of service, until all the loans have been paid. I think it is 20% a year, so if he stays 5 years at this hospital he won't have to repay any loans. Different hospitals may have different percentages. </p>

<p>It seems that new doctors need to be willing to go to under represented areas in order to have their loans repaid by the hospitals. Places that are particularly rural or places that are more of a vacation spot but not a place people go to actually live.</p>

<p>OK, a few things---</p>

<p>1) many (all?) private medical schools will require parental financial info until the student reaches age ~26-32. (What age depends on the school. If parental info is required the first year, it will be required all four years.) There will usually be a expected family contribution based upon income and assets.</p>

<p>2) Med students are eligible for unsubsidized Staffords up to $40,500 annually. (Med students used to be eligible for unsub Staffords, but the law changed this year and beginning July 2012, only unsub loans will be offered.) </p>

<p>3) Additionally, med students are eligible for Grad Plus loans (assuming good credit) for the COA above the Stafford limit up to $65,000/year.</p>

<p>4) Some medical school may offer scholarships for very high achieving, highly desirable students. A very few med schools (think some of the Ivies, Mayo, possibly Duke) have something called "unit loans"--which is base amount each student is expected to take out in loans regardless of financial need. Above the unit loan + family contribution, these few schools will offer grants.</p>

<p>5) There are loan repayment for service programs. There is a federal program and there may be state programs. (My state has one, but not all states do.) These programs are for primary care doctors only </p>

<p>Here's a list of state programs: Loan</a> Repayment/Forgiveness and Scholarship Programs.</p>

<p>National Health Service Corp loan repayment for service program here:</p>

<p>[Scholarships</a> - NHSC<a href="This%20program%20has%20become%20increasingly%20competitive.%20Not%20all%20applicants%20will%20be%20accepted.">/url</a></p>

<p>Usually a set amount (typically $45,000/year) is paid by the state/federal government toward a doctor's student loans for each year of service in a medically underserved area. Typically these areas are either very rural or impoverished, inner city areas and are determined by federal census data. Student can request a location, but there is no guarantee they will be assigned there. There is a minimum of a 2 year commitment to this program. If the student leaves before completing the minimum commitment, any repayment is withdrawn. New doctor will still earn a salary in these programs.</p>

<p>Students may not pursue a specialty residency until after leaving the program.</p>

<p>5) One other option is to apply for HPSP (Health Services Scholarship Program) thru one of the branches of the military.</p>

<p><a href="http://www.med.navy.mil/sites/navmedmpte/accessions/pages/healthprofessionsscholarshipprogram_prospective.aspx%5B/url%5D"&gt;http://www.med.navy.mil/sites/navmedmpte/accessions/pages/healthprofessionsscholarshipprogram_prospective.aspx](&lt;a href="http://nhsc.hrsa.gov/scholarships/index.html%5DScholarships"&gt;http://nhsc.hrsa.gov/scholarships/index.html)&lt;/a&gt;&lt;/p>

<p>This the Navy's info sheet but all the branches of the service have basically the same requirements. A newly commissioned doctor will owe 3-4 years active duty plus 4-5 years of ready reserve. All HSPS recipients are required to accept a military residency immediately upon graduation. </p>

<p>6) Some local communities--esp. in rural areas--will help repay medical student debt on a limited basis. They typically offer a lower repayment amount than federal/state programs, and there is no central clearinghouse of their availability, but they will sometimes "buy" specialists if the specialty is a critically needed one (anesthesiology, for example).</p>

<p>Oops! Just my state website--repayment is $25,000/year, not $45,000.</p>

<p>And the NHSC is a scholarship which pays tuition, fees plus $1200/month living expenses. The recipient must enter a primary care specialty (psychiatry, pediatrics, internal medicine, family practice, OB/GYN) and their obligation can be deferred until after a primary care residency. For each year of scholarship, the doctor owes 2 year of service full time or 4 years of service part time. Failure to fulfill the service portion requires a repayment of 3 times the original scholarship amount plus interest.</p>

<p>Two of my friends also entered the military DURING residency, which allowed them to choose where they wanted to do residency. They received a stipend during residency, and then had to pay back time working as a primary care doc to military families for a few years. </p>

<p>And yes, you get paid for residency, but it's not a lot of money. If you are paying back loans and/or have kids, things are pretty tight. My husband and I had a baby the last year we were at Dartmouth and I seriously thought she might freeze to death because heat was too expensive to pay for. </p>

<p>My advice for students interested in medicine is to not spend too much money on undergrad or med school. A good state med school is less expensive than a fancy one and it's less important where you go to med school than where you do your residency.</p>

<p>Thank you all for the suggestions, and WOWM thanks for taking the time for your links.</p>

<p>Thanks, also, from this lurker.</p>

<p>I don't know if you are in California, but the National Health Service Corps program is doing some innovative things for Californian med students.</p>

<p>The NHSC Scholarship program is more restrictive, but there is so much money now for the NHSC Loan Repayment program that it is easier to get and practically pays off the entire med school debt after 5 years. ( I used to help administer this program here, so I highly recommend it.)</p>