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FINANCING YOUR MEDICAL EDUCATION

FINANCING YOUR MEDICAL EDUCATION. 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. FINANCIAL AID APPLICATION PROCESS. O

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FINANCING YOUR MEDICAL EDUCATION

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  1. FINANCING YOUR MEDICAL EDUCATION

  2. 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

  3. FINANCIAL AID APPLICATION PROCESS O C EXPLORE THE FINANCIAL AID APPLICATION PROCEDURES AND DEADLINES T OOBTAIN INSTITUTIONAL APPLICATION FORMS B EBEGIN RESEARCHING THE WEB FOR SCHOLARSHIPS R J A N UFILL OUT THE FAFSA ON THE WEB A R Y MOBTAIN ESTIMATES OF FINANCIAL AID OFFERS FROM ALL SCHOOLS A YMAKE A DECISION AS TO WHICH MEDICAL SCHOOL YOU WANT TO ATTEND

  4. UCSD 1st YEAR MEDICAL SCHOOL 2013-14 BUDGET

  5. PUBLIC VS. PRIVATE MEDICAL SCHOOL TUITION AND FEES *National Average for 2012-13 according to the AAMC **2013-14 tuition & fees

  6. FINANCIAL AID AWARDS • 50% OF THE ENTIRE CLASS WILL RECEIVE SCHOOL BASED FINANCIAL AID PACKAGE • THE NEEDIEST SCHOOL PACKAGE FOR 2013-14 IS $35,562 (First Year Class) ($31,235 GRANT & $4,325 SCHOOL LOAN) • THE LOWEST NEED SCHOOL-BASED PACKAGE FOR 2013-14 IS $31,962 • ($15,597 GRANT & $16,365 LOAN) (First Year Class)

  7. HOW YOUR AWARDS ARE DETERMINED 2013-14 SINGLE STUDENTS PARENTS’ CONTRIBUTION NEED CATEGORY STUDENT IS SINGLE & PARENT’S STUDENT IS SINGLE & PARENT’S CONTRIBUTION IS > $29,701 CONTRIBUTION IS < $29,701 NEED CATEGORY 1 NEED CATEGORY 2 -- 5 STUDENT IS ELIGIBLE FOR STUDENT IS ELIGIBLE FOR FEDERAL STAFFORD LOAN INSTITUTIONAL GRANTS & ONLY LOANS

  8. 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.

  9. HOW YOUR AWARDS ARE DETERMINED 2013-14 MARRIED STUDENTS WITHOUT CHILDREN SPOUSE’S GROSS MONTHLY INCOME NEED CATEGORY STUDENT IS MARRIED & SPOUSE’S STUDENT IS MARRIED, SPOUSE’S GROSS INCOME IS > $3,515/MONTH GROSS INCOME < $3,515/MONTH NEED CATEGORY 1 NEED CATEGORY 2 STUDENT IS ELIGIBLE FOR STUDENT IS ELIGIBLE FOR FEDERAL STAFFORD LOANS INSTITUTIONAL GRANTS & ONLY LOANS

  10. FINANCIAL AWARD SAMPLESingle student without children EFC = $2310 (Estimated Family/Parent Contribution) Need Category 5 eligible for school aid $31,235– School Grant $ 4,327– School Loan TOTAL $35,562 Budget $56,820 Student Contribution - $ 1,000 Financial Need $55,820 School Aid - $35,562 Unmet Need $20,258 Federal Loans $20,258 Unsubsidized Direct Loan ($40,500 max) Unmet Need $0

  11. FINANCIAL AWARD SAMPLESingle student without children EFC = $29,702 (Estimated Family/Parent Contribution) Need Category 1 Not Eligible for School Aid $0 Budget $56,820 Student Contribution - $1000 Financial Need $55,820 School Aid - $0 Unmet Need $55,820 Federal Loans - $40,500 Unsubsidized Direct Loan Unmet Need $15,320 Graduate PLUS Loan

  12. CATEGORIES OF FINANCIAL AID • INSTITUTIONAL AID • BASED ON STUDENT’S & 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

  13. CATEGORIES OF FINANCIAL AID • OUTSIDE FEDERAL LOANS • FEDERAL DIRECT UNSUBSIDIZED LOAN • INTEREST RATE 5.41% - for loans disbursed between July 1, 2013 to June 30th, 2014 • ORIGINATION FEE 1.072% • ANNUAL MAXIMUM $40,500 • 6 MONTH GRACE PERIOD • FEDERAL DIRECT GRAD PLUS LOAN • INTEREST RATE 6.41% – for loans disbursed between July 1, 2013 to June 30th, 2014 • ORIGINATION FEE 4.288% • NO ANNUAL MAXIMUM • 6 MONTH GRACE PERIOD – for loans disbursed after July 1, 2008

  14. 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 STUDENT’S 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.

  15. AVERAGE MEDICAL SCHOOL DEBT $155,978 $183,066 $106,670 *Per AAMC Medical Student Education: Debt, Costs, and Loan Repayment Fact Card for the Class of 2012 **Figures include premedical education debt

  16. ESTIMATE OF REPAYMENT LOAN AMOUNT OF $125,000 AT 6.8% INTEREST RATE

  17. CAN I AFFORD THE MONTHLY PAYMENT ON MY SALARY ? AVERAGE ANNUAL SALARY OF FAMILY PRACTITIONER GROSS MONTHLY PAY FOR A SALARY OF $150,000/YEAR MONTHLY LOAN PAYMENT BASED ON 10-15% OF SALARY $150,000 $12,500/MO $1250- $1875/MO

  18. THE IMPORTANCE OF CREDIT RATING • THE GRAD PLUS LOAN PROGRAM REQUIRES A CREDIT CHECK • A GRAD PLUS APPLICANT IS CONSIDERED TO HAVE ADVERSE CREDIT IF: • APPLICANT IS 90 DAYS OR MORE DELINQUENT ON THE PAYMENT OF ANY DEBT • APPLICANT HAD ANY DEBT DISCHARGED IN BANKRUPTSY ANY TIME IN THE LAST FIVE YEARS • THE APPLICANT HAS BEEN THE SUBJECT OF A DEFAULT DETERMINATION ON ANY DEBT, FORECLOSURE, A TAX LIEN, A REPOSSESSION, A WAGE GARNISHMENT, OR A WRITE-OFF OF A TITLE IV DEBT ANY TIME DURING THE LAST FIVE YEARS

  19. WHAT’S 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

  20. 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 • DON’T BORROW MORE THAN YOU NEED • ALWAYS KNOW EXACTLY HOW YOU WILL REPAY THE DEBT AND HOW IT WILL AFFECT YOUR MONTHLY BUDGET

  21. 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 AS OPTION, IF AVAILABLE

  22. Contact the Financial Aid Office QUESTIONS???

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