FINANCING YOUR MEDICAL EDUCATION

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FINANCING YOUR MEDICAL EDUCATION
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TOPICS

• THE FINANCIAL AID PROCESS
• MEDICAL SCHOOL COSTS BUDGET
• DETERMINING FINANCIAL AID AWARDS
• CATEGORIES OF FINANCIAL AID
• MEDICAL SCHOOL DEBT
• THE IMPORTANCE OF CREDIT RATING
• QUESTIONS

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FINANCIAL AID APPLICATION PROCESS

• O
• C EXPLORE THE FINANCIAL AID APPLICATION
  PROCEDURES AND DEADLINES
• T
• O OBTAIN INSTITUTIONAL APPLICATION FORMS
• B
• E BEGIN RESEARCHING THE WEB FOR SCHOLARSHIPS
• R
• J
• A
• N
• U FILL OUT THE FAFSA ON THE WEB
• A
• R
• Y
• M OBTAIN ESTIMATES OF FINANCIAL AID OFFERS FROM
  ALL SCHOOLS
• A
• Y MAKE A DECISION AS TO WHICH MEDICAL SCHOOL YOU
  WANT TO ATTEND

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UCSD MEDICAL SCHOOL 2007-08 BUDGET
O F F C A M P U S
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UCSD MEDICAL SCHOOL 2007-08 BUDGET
O N C A M P U S
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UCSD MEDICAL SCHOOL 2007-08 BUDGET
TOTAL FOR 4 YEARS 192,599 OFF CAMPUS
175,983 ON CAMPUS
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PUBLIC VS. PRIVATE MEDICAL SCHOOL COSTS
National Average for 2004-05 according to the
AAMC Tuition and Fees only
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FINANCIAL AID AWARDS

• 60 OF THE ENTIRE CLASS WILL RECEIVE SCHOOL BASED
  FINANCIAL AID PACKAGE.
• THE NEEDIEST SCHOOL PACKAGE FOR 2005-06 IS
  24,273
• (19,980 GRANT 4293 SCHOOL LOAN)
• THE LOWEST NEED SCHOOL-BASED PACKAGE FOR 2005-06
  IS 20,673 (10,301 GRANT AND 10,372 LOAN)

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HOW YOUR AWARDS ARE DETERMINED2005-06

• SINGLE STUDENTS
• PARENTS CONTRIBUTION
• NEED CATEGORY
• STUDENT IS SINGLE PARENTS STUDENT IS
  SINGLE PARENTS
• CONTRIBUTION IS gt 23,887 CONTRIBUTION IS lt
  23,887
• NEED CATEGORY 1 NEED CATEGORY 2 -- 5
• STUDENT IS ELIGIBLE FOR STUDENT IS ELIGIBLE
  FOR
• FEDERAL STAFFORD LOAN INSTITUTIONAL GRANTS
• ONLY LOANS

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WHY USE PARENTS INCOME AND ASSET INFO?

• STUDENTS FROM LOW-INCOME BACKGROUNDS USUALLY
  ENTER MEDICAL SCHOOL WITH A SUBSTANTIALLY HIGHER
  DEBT THAN STUDENTS FROM MORE AFFLUENT FAMILIES.
• IN GENERAL, STUDENTS FROM AFFLUENT BACKGROUNDS
  ARE ABLE TO CALL ON THEIR PARENTS FOR FINANCIAL
  HELP, WHEREAS STUDENTS FROM LOWER INCOME FAMILIES
  DO NOT HAVE ACCESS TO THIS RESOURCE.
• IF LIMITED SCHOOL-BASED FUNDS WERE DISTRIBUTED
  EVENLY AMONG ALL STUDENTS IN THE SCHOOL,
  REGARDLESS OF PARENT INCOME, THE AMOUNT OF GRANT
  AND LOW-INTEREST LOAN MONEY AVAILABLE TO EACH
  STUDENT WOULD BE SUBSTANTIALLY REDUCED.

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HOW YOUR AWARDS ARE DETERMINED2005-06

• MARRIED STUDENTS WITHOUT CHILDREN
• SPOUSES NET MONTHLY INCOME
• NEED CATEGORY
• STUDENT IS MARRIED SPOUSES STUDENT IS
  MARRIED, SPOUSES NET INCOME IS gt
  1926/MONTH INCOME lt 1926/MONTH
• NEED CATEGORY 1 NEED CATEGORY 2
• STUDENT IS ELIGIBLE FOR STUDENT IS ELIGIBLE
  FOR
• FEDERAL STAFFORD LOANS INSTITUTIONAL GRANTS
• ONLY LOANS

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FINANCIAL AWARD SAMPLESingle student without
children

• EFC 2083 (Estimated Family/Parent
  Contribution)
• Need Category 5 eligible for school aid
  19, 980 School Grant 4293 School
  Loan
• TOTAL 24,273
• Budget 42,550
• Student Contribution - 1000
• Financial Need 41, 550
• School Aid - 24, 273
• Unmet Need 17, 277
• Federal Loans 8,500 Subsidized
  Stafford (8500 max)
• 8,777 Unsubsidized Stafford
  (30,000 max)
• Unmet Need 0

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FINANCIAL AWARD SAMPLESingle student without
children

• EFC 23,900 (Estimated Family/Parent
  Contribution)
• Need Category 1 Not Eligible for School Aid 0
• Budget 42,550
• Student Contribution - 1000
• Financial Need 41,550
• School Aid - 0
• Unmet Need 41,550
• Federal Loans - 8,500 Subsidized
  Stafford
• - 30,000
  Unsubsidized Stafford
• Unmet Need 3020 Alternative Loans

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CATEGORIES OF FINANCIAL AID

• INSTITUTIONAL AID
• BASED ON STUDENTS PARENTS INCOME AND ASSETS
• INCLUDES GRANTS, SCHOLARSHIPS, FELLOWSHIPS AND
  LOANS
• OUTSIDE GRANTS AND SCHOLARSHIPS
• USUALLY RESTRICTIVE IN NATURE
• BASED ON FACTORS SUCH AS THE AREA OF RESIDENCE,
  ETHNICITY, RELIGIOUS AFFILIATION, ETC.
• EXAMPLES NATIONAL MEDICAL FELLOWSHIPS, BECA
  SCHOLARSHIP, NATIONAL HISPANIC SCHOLARSHIP, THE
  CHINESE AMERICAN MEDICAL SOCIETY SCHOLARSHIP

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CATEGORIES OF FINANCIAL AID

• OUTSIDE LOANS
• FEDERAL LOANS (SUBSIDIZED AND UNSUBSIDIZED)
• HAVE BETTER TERMS THAN THE ALTERNATIVE LOANS
• INTEREST CAP AT 8.25
• DONT REQUIRE CREDIT CHECK
• PRIVATE LOANS (THROUGH OUTSIDE LENDERS)
• ALTERNATIVE LOANS - REQUIRE CREDIT CHECK
• OTHER OUTSIDE AGENCY LOANS - MAY OR MAY NOT
  REQURE CREDIT CHECKS
• CANT BE CONSOLIDATED WITH YOUR FEDERAL LOANS

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CATEGORIES OF FINANCIAL AID

• SERVICE OBLIGATION PROGRAMS
• REQUIRE A COMMITMENT TO PRACTICE IN A PARTICULAR
  FIELD OF MEDICINE OR IN A SPECIFIC GEOGRAPHIC
  LOCATION
• HAVE STIFF PENALTIES FOR DEFAULTING ON THE
  SERVICE COMMITMENT
• EXAMPLES ARMED FORCES SCHOLARSHIP PROGRAMS, THE
  NATIONAL HEALTH SERVICE CORPS AND THE PRIMARY
  CARE LOAN
• LOAN REPAYMENT PROGRAMS
• PROVIDE BACK-END HELP AFTER GRADUATION FROM MED
  SCHOOL BY REPAYING ALL OR A PORTION OF A
  STUDENTS OUTSTANDING EDUCATIONAL DEBT
• MOST ARE TIED TO PRACTICING IN A PARTICULAR AREA
  OF MEDICINE OR SPECIFIED GEOGRAPHIC LOCATION
• EXAMPLES NATIONAL HEALTH SERVICE CORPS LOAN
  REPAYMENT PROGRAM, THE CALIFORNIA STATE LOAN
  REPAYMENT PROGRAM, ETC.

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MEDICAL SCHOOL DEBT
ACCORDING TO THE AAMC FOR 2004 INCLUDES
PRE-MATRICULATION DEBT
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ESTIMATE OF REPAYMENT
LOAN AMOUNT OF 100,000 AT 8.25 INTEREST RATE
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CAN I AFFORD THE MONTHLY PAYMENT ON MY SALARY ?

• AVERAGE ANNUAL SALARY
• OF FAMILY PRACTITIONER
• GROSS MONTHLY PAY FOR
• A SALARY OF 142,000/YEAR
• MONTHLY LOAN PAYMENT
• BASED ON 30-40 OF SALARY

142,000
11,833/MO
3550 - 4733/MO
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THE IMPORTANCE OF CREDIT RATING

• ALTERNATIVE LOAN PROGRAMS REQUIRE A CREDIT CHECK
• LENDER WILL LOOK AT
• DEROGATORY CREDIT
• EDUCATIONAL LOAN DEFAULTS
• HISTORY OF LATE PAYMENTS ON CONSUMER DEBT

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WHATS A GOOD CREDIT SCORE?

• 800 EXCELLENT
• 750-799 VERY GOOD TO EXCELLENT
• 700-749 GOOD TO VERY GOOD
• 650-699 FAIR TO GOOD
• 600-649 POOR TO FAIR
• BELOW 600 VERY POOR TO POOR

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HOW TO MAINTAIN GOOD CREDIT?

• RETIRE CREDIT CARD DEBT BEFORE ENTERING MEDICAL
  SCHOOL
• OBTAIN A COPY OF YOUR CREDIT REPORT AND CLEAN UP
  ANY NEGATIVE CREDIT THAT YOU CAN
• DONT BORROW MORE THAN YOU NEED
• ALWAYS KNOW EXACTLY HOW YOU WILL REPAY THE DEBT
  AND HOW IT WILL AFFECT YOUR MONTHLY BUDGET

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WHAT TO DO IF DENIED?

• OBTAIN AND REVIEW CREDIT REPORT USED IN DECISION
  PROCESS BY LENDER
• CORRECT ANY ERRORS CONTAINED IN REPORT
• APPEAL CREDIT DECISION, IF APPROPRIATE
• CONSIDER CO-SIGNER OR NON-STUDENT BORROWER AS
  OPTION, IF AVAILABLE

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Contact the Financial Aid Office

• QUESTIONS???