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Most sources of financial support for medical school are loans; unfortunately deferred interest or low interest loan sources are limited. By submitting the FAFSA and other required forms, you will automatically be considered for all available loan sources awarded by The University of Iowa, including the federal loans noted below.
The largest federal loan source is the Federal Direct Unsubsidized Stafford Student Loan. Medical students may borrow up to $42,722 per year when they are in school for a ten-month period (M1/M2 years); up to $47, 167 for M3 students enrolled for a 12-month period; and up to $44,944 for M4 students enrolled for an 11-month period. Graduate and professional students have not been eligible for subsidized Stafford loans since 7/1/12.
The Federal Unsubsidized Direct Stafford Loan accrues interest as soon as the loan is disbursed. Your award letter will generally include the maximum amount for which you are eligible unless a more attractive source has been awarded to you. In addition to the Direct Unsubsidized Stafford loans, you may also qualify for Federal Perkins, Direct GradPlus, Primary Care Loan, a number of collegiate loans, or private alternative loans. Master promissory notes for the federal sources are typically required the first year that you borrow from each of these programs and are good for 10 years. Collegiate promissory notes will need to be signed each academic year.
This is a non-deferred, non-need-based federal loan. The maximum loan amounts each year are noted above and are dependent on whether your academic year is ten, eleven or twelve months in length. There is an overall educational loan indebtedness cap under the Stafford program of $224,000 (counting both undergraduate and graduate loans). The unsubsidized loan is not based on financial need and does not include interest subsidy during in-school periods. Borrowers are responsible for accrued interest either by making semi-annual interest payments while in school, or by delaying interest payments until after graduation. Loans disbursed before 6/30/06 had variable interest rates with an interest rate cap of 8.25%. Loans disbursed between July 1, 2006 and June 30, 2013 had a fixed interest rate of 6.8%. Loans disbursed between 7/1/13 and 6/30/14 had a fixed interest rate of 5.41%, while new loans disbursed between 7/1/14 and 6/30/15 have a fixed interest rate of 6.21%. The new fixed rate for 15-16 is not yet known. Most currently enrolled or prospective students will be required to start repayment on their loans after a six-month grace period following graduation or leaving school.
Beginning July 1, 2006, graduate students became eligible to borrow PLUS loans (previously these loans have been available only to the parents of dependent undergraduate students). These loans are unsubsidized loans, and between 7/1/06 and 6/30/13 they had a fixed interest rate of 7.9%. Beginning 7/1/13 the interest rate was changed to a fixed rate that fluctuates for new loans every year. For the period from 7/1/13 to 6/30/14 the interest rate was 6.41%; for the period from 7/1/14 to 6/30/15, the interest rate is 7.21%. The rate for 15-16 is not yet known. The limit for PLUS loans is your Cost of Attendance minus other financial aid awarded. Passing a satisfactory credit check is required to be eligible to receive this loan. Grad PLUS loans disbursed prior to July 1, 2008 entered repayment within 60 days of graduation or leaving school. Grad PLUS loans disbursed after 7/1/08 are eligible for a six month post-enrollment deferment to help align repayment with Stafford loans. Borrowers will need to request this post-enrollment deferment from their loan servicer if they are interested in delaying repayment. Interest can be capitalized onto their principal at least quarterly during this deferment period.
This is a federally funded loan program administered by The University of Iowa Office of Student Financial Aid. To be eligible, you must be at least a half-time student with financial need of more than half of your overall educational costs. The maximum loan for medical students is $4,000 per year, with a $40,000 overall maximum (including undergraduate loans). The repayment period is up to ten years. There is a nine-month grace period after the borrower ceases to be at least a half-time student. For loans disbursed prior to July 1, 1993, there is a two-year deferral during medical residency training (followed by another six month grace period). The interest rate is fixed at 5% per annum simple interest beginning when the loan enters repayment. Loans made after July 1, 1993 are not eligible for medical residency deferment and will enter repayment 9 months after graduation or leaving school. The first year of receiving this loan requires a master promissory note to be signed.
The Health Professions Student Loan was renamed the Primary Care Loan Program for new allopathic medicine borrowers after July 1, 1993. The Primary Care Loan has a service requirement to enter and complete a residency training program in primary health care no later than four years after the date on which the student graduates from such school. Another requirement is to practice primary health care until the loan is paid in full. For loans made on or after March 23, 2010, the borrowers are to practice in primary health care for either 10 years (including the years spent in residency training) or through the date on which the loan is repaid in full, whichever occurs first. Parental financial information must be provided to be considered for this loan program. The definition of "primary care residency training" means a residency program in Family Practice, General Internal Medicine, General Pediatrics, Combined Medicine/Pediatrics or Preventive Medicine. Physicians who enter subspecialty training, even in one of the afore-mentioned specialties, will not be considered to be practicing primary care medicine. The Primary Care Loan is a deferred interest loan until it enters repayment. Interest that accrues during repayment is 5% and the normal repayment term is ten years. PCL loan repayment can be extended over 10 to 25 years, at the discretion of the institution. Interest penalties (7% interest) exist for noncompliance with the service requirement so do not accept the loan unless you are fully committed to primary care medicine.
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