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Most sources of financial support for medical school are loans. Low interest or deferred interest loan sources are limited. By submitting the FAFSA and other required forms noted above, you will automatically be considered for all available loan sources awarded by The University of Iowa. Below are various types of federal loans available.
The two largest federal loan sources are the Federal Subsidized and Unsubsidized Direct Stafford Student Loans. Medical students may borrow up to $40,500 per year from these two programs (combined) when they are in school for a nine-month period; 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.
IMPORTANT NOTE FOR 2012-13 ACADEMIC YEAR: Graduate/professional students are no longer eligible for a Federal Direct Subsidized Stafford for loan periods beginning on or after 7/1/12. Therefore, only M3/M4/PA students can anticipate receiving a subsidized Stafford loan for 2012-13. Loan limits (both annual and aggregate) remain unchanged.
The Federal Subsidized Direct Stafford ($8,500 annual maximum) is a deferred interest loan program so interest does not accrue on the loan while the borrower is in school. The Federal Unsubsidized Direct Stafford Loan accrues interest as soon as the loan is disbursed, although borrowers do not have to make interest payments while in school. Your award letter will include the maximum amount for which you are eligible unless a more attractive source has been awarded to you. In addition to the Stafford loans, you may also qualify for Federal Perkins, 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. If it has been 10 years since your first initial master promissory note, a new one will need to be completed for further disbursement of the Stafford Loans. Collegiate promissory notes will need to be signed each semester. You'll receive these prior to each semester.
This loan is obtained directly from the U.S. Department of Education through the University of Iowa. To be eligible, you must demonstrate need as calculated by the FAFSA, be at least a half-time student and a citizen or permanent resident of the United States and beginning in 2012-13, have a loan period that begins before 7/1/12. The maximum that can be borrowed for graduate study is $8,500 per year, with an overall maximum of $65,500. The federal government pays the interest while the borrower is in school and during corresponding grace periods. The standard repayment period is 10 years beginning six months after graduation or deferment. Extended repayment plans of up to 30 years are available. Loans first disbursed before 6/30/06 typically have variable interest rates. New loans after July 1, 2006 have a fixed interest rate of 6.8%. 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.
This is a non-deferred, non-need-based federal loan program with many of the same terms and conditions as the Federal Direct Subsidized Stafford Loan Program. At this writing, the maximum loan for graduate study is $40,500 per year less any subsidized Stafford loans for students enrolled over a 9-month enrollment period ($47,167 less subsidized Staffords for students enrolled over a 12-month period and $44,944 less subsidized Staffords for students enrolled over a 11-month enrollment period). There is an overall educational loan indebtedness cap under the Stafford program of $224,000. 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 quarterly interest payments while in school, or by delaying interest payments until after graduation. Loans first disbursed before 6/30/06 typically have variable interest rates. New loans after July 1, 2006 have a fixed interest rate of 6.8%. 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 current have a fixed interest rate of 7.9% which begins to accrue at disbursement. 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 enter repayment within 60 days of graduation or falling less than a half-time enrollment. Grad PLUS loans disbursed prior to July 1, 2008 will enter 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 the direct loan servicing center if they are interested in delaying repayment. Interest can be capitalized onto their principal at least quarterly during this deferment.
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 $2,000 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 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 for 10 years after completion of a primary care residency program. 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. Interest penalties (7% interest) exist for noncompliance with the service requirement so do not indicate your willingness if you are not fully committed to primary care medicine. PCL loan repayment can be extended over 10 to 25 years, at the discretion of the institution.
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