Student Loans 101: Which is Right For Me?

Let's face it. When it comes to learning the medical profession, the motivating and drive may be there but the cash always isn't. It's expensive and time consuming. Even those students lucky enough to have a scholarship sometimes have a need for additional money to continue their education. Is it time to search out a student loan? Consider the types of loans available and your own personal situation before making any decisions.

Federal Stafford loans are available to medical students in two different ways. Federal Family Education Loan Programs (FFELP) and the William D. Ford Direct Loan. The main difference between the two is that the FFELP loans are monies that are borrowed through a bank or other financial institution and guaranteed from the state they were issued in. The Direct loans are funds that are borrowed and guaranteed directly from the federal government. They are both the same loan but each school will usually participate in one or the other. There is a designated amount that can be borrowed depending on the year of school you are in and the cost of your tuition. Any other financial aid you are receiving may also be subtracted from this loan. It has a variable interest rate with a cap. You begin repaying Stafford loans six months after you are going to school less than half time. There is a grace period of six months before repayment begins.

Federal Perkins Loans are very popular among students. Students like the Perkins loan because of the low 5% fixed interest rate and the fact that repayment doesn't begin until 9 months after graduation or when the student begins going less than half time. They are a little more difficult to get however. The government gives the school a designated amount of funds for these loans and then the school decides the eligibility requirements. The are usually given to students in the most dire need and can be as large as $3,000.

Your parents are also able to secure a federal loan for your education with the Federal Parent Loans for Undergraduate Students (PLUS). They have a interest rate cap of 9% and repayment begins 60 days after the first or second disbursement check is issued. Full repayment is usually required within 10 years. The highest amount available to borrow depends on the cost of tuition and can be diminished by the amount of any other financial aid given.

Federal loans are sometimes not enough, especially for longer degree programs. There are a variety of alternative loan assistance programs available specifically for nursing and medical students. Most often provided by private institutions and benefactors. The terms and availability of these loans vary. They can be denied for bad credit and other factors.

Contact your schools financial aid office to find out the programs available to you and your best course of action.

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