Medical School Students Fill in the Financial Aid Gaps with Private Loans
by: mayura
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In a perfect world, those who wanted
to gain an education could do so with no strings attached. There would
be no costs involved with furthering one's knowledge, and no debt to
repay after the education is attained. Unfortunately, the world we live
in is far from perfect.
Those who wish to gain a medical degree in order to aid
others and save lives are usually hit the hardest when it comes to the
monetary costs of pursing their degrees. The cost of medical school is
expensive. According to the Association of American Medical Colleges
(AAMC), the mean cost of attending medical school for this 2006-2007
school year will be ,629 for in-state public medical schools, and
,377 for in-state private medical schools!
Another unfortunate fact is that in most cases, federal
financial aid alone will not compensate for the high costs of attending
medical school. Many medical students are falling back on private or
alternative loans to fill in the gap left between the amounts of
funding that they can receive from grants, scholarships and federal
loans and the costs of attending medical school. Private loans, or
alternative loans, are funded by private financial institutions such as
banks, schools, etc, and are becoming a growing industry and popular
source of educational funding.
The Pros and Cons of Private Loans
In addition to filling in gaps left by lack of financial aid or federal
loan limits, private loans also offer other advantages in comparison to
federal loans, credit cards and other sources. (As a note, the
following advantages pertain to private loans in general. Most lenders
will offer these benefits, but it is not guaranteed. Shop around to
find a lender that will offer you the best benefits.)
One of the largest advantages to taking out private loans
is that borrowers can apply at any time. Unlike federal loans, there
are no deadlines or windows in which one can apply. Borrowers may apply
for private loans whenever the need arises. Also, private loans do not
require lengthy paperwork or long applications like the FAFSA. Some
lenders can tell you over the phone—within minutes—whether or not you
qualify and what your interest rates will be.
Usually, private loans offer much higher loan limits than
federal loans. Some private lenders offer over ,000 each year. In
addition to the higher loan limits, some lenders also offer borrower
benefits, such as interest rate reductions or rebates. Also, some
private lenders offer longer grace periods of up to 12 months, where as
federal loans range from 6-9 months, depending on the type of loan.
Some students face the dilemma that they or their parents
have too large of an income to qualify for federal financial aid, but
do not have enough money to pay for schooling without outside
assistance. Private loans can help with this scenario in that they are
not disbursed based on need. Therefore, regardless of the amount of
money that the borrower or the borrower's parents make, they can still
qualify to take out a private loan.
Private loans are disbursed more quickly than federal
loans. Also, Private loans may be disbursed directly to the borrower,
as opposed to federal loans. This gives the borrower quick and easy
access to the funds.
Borrowers can use the money from their private loans to pay for
tuition, fees and housing as well as any additional educational costs
that students might not have factored into their initial funding needs,
such as computers, supplies and other everyday expenses related to
education. Students who wish to study abroad may also use their private
loans to fund their schooling abroad.
Students may find that they have more freedom to attend the
schools that they want to with private loans. This is because most
private loans do not require school certificates through Title IV of
the Higher Education Act, unlike federal loans.
International students who will not be able to qualify for
federal loans have an option to pay for schooling in the united states
with private loans. Some private lenders allow for international
students to apply for private loans with an eligible U.S. resident who
will cosign with the student.
Private loans are not only for students, but also for
parents. Parents of students can take out private loans for the
educational purposes of their student(s). However, parents will not
have a grace period prior to repayment.
A disadvantage to private loans is that they are unsecured
loans that usually have high interest rates and fees attached to them.
They are also credit-based, which can be bad for those with no credit
or poor credit. However, most lenders allow for cosigners to assist
potential borrowers in qualifying for private loans, as well as
improving the interest rates attached to the loan. Taking out a private
loan with a cosigner is also a way for potential borrowers who have not
yet established credit to establish a credit history.
Requirements for Private Loans
Student borrowers must be enrolled at college at least half-time in
order to participate in a Private Student Loan Program. Other
requirements include being enrolled at a school approved by the
Education Resources Institute (TERI) in either a degree or certificate
program.
Private Loan Consolidation with Medical School Loans
To assist private loan borrowers in saving thousands of dollars off of
their loans, Medical School Loans offers our Private Loan Consolidation
program. Medical School Loans offers competitive interest rates and
repayment options. We also offer appealing borrower benefits, such as
an immediate 0.25% interest rate reduction when borrowers enroll in our
automated debit payment program. It is also to borrowers' advantage to
consolidate their private student loans with Medical School Loans, in
that we offer a thirty-year maximum repayment term, regardless of the
loan balance.
Our application process to consolidate your private medical
student loans is quick and simple. With just a short phone call, our
dedicated agents will be able to determine a potential borrower's
eligibility for a private student loan consolidation with us. Within
minutes and a quick credit check, our agents will also be able to tell
a borrower their interest rate, consolidation loan limit, the amount
that the origination fee will be, as well as information on
money-saving borrower benefits.
Medical School Loans also gives borrowers the option to
save up to .75% more off of their interest rate by adding a cosigner to
their Private Loan Consolidation. However, the borrower must qualify
for the consolidation based on his or her own credit worthiness prior
to the cosigner being permitted.
About Medical School Loans
Medical School Loans is dedicated to assisting medical school students
and physicians with financing their medical school expenses and
managing their educational loans. We are committed to helping medical
students reach financial success. At Medical School Loans, we realize
that the burden of student loan debt that medical school students and
physicians carry is much heavier than that of the average student or
working professional. Because of this burden, we work hard to quickly
and accurately process our consolidation requests to help our clients
start saving money now! Medical School Loans only offers these services
to physicians and medical school students. By concentrating our efforts
on only those in this influential field of study, we are able to put
forth a higher standard of service, therefore, setting the bar for the
medical student loan and consolidation industry.
Only Borrow What is Necessary
Due to the high interest rates that go along with private loans,
borrowers are encouraged to exhaust all federal financial aid options
prior to taking out private loans. However, when all federal options
are drained, private loans are a great way to finish paying for medical
school. Regardless of the type of loan that is chosen, borrowers should
only borrow as much as absolutely necessary, because eventually, all of
the loans will need to be repaid with interest.
For more information regarding medical schools, and the costs involved, go to www.aamc.org
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