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Well Congratulations once again, it has been a long journey I bet to this point, but things have only really just begun.  They have only just begun in terms of work, but also in terms of gratification, and rewards, and the impact you will have on the lives of real people, their families and friends.  Medical School is an incredible process, one in which at the end of your term, you will become a doctor, with that coming the ability to diagnose and treat disease, for the purpose of helping to heal the sick.  Before you begin, there are a few basic things that you can do in preparation before setting foot into a classroom.

You will need to be very comfortable in your new environment to do well in medical school.  Distractions must be down to a minimum.  Common distractions you can avoid, especially during the first few weeks while you are trying to adjust to the amount of work are: housing, finance, and transportation.  Since you will not receive any money from financial aid until several weeks into the academic year, you will be expected to have enough money to move, pay rental deposits, and live until your first check comes in.  For some, this expense is easily met by family support, spouses or significant others, or savings from a previous career.  For most, this expense must come from summer employment, or partially from credit cards (always try to minimize this option as much as possible.)  I would recommend trying employment in something different, so that you can enjoy your time, and learn new things, before you take the plunge into medicine.  A good source of employment for recent grads are temporary agencies.  Especially if you live in a big city.  This is especially true if you can type fast, and are proficient in Microsoft Office products.  I for instance temped in New York City one summer and got paid $18/hour, and this was back in 2000.  I had a blast doing it, and got to learn about new industries since none of my placements where in the medical industry.

Living within your budget. 

At this point you have hopefully completed all of your financial aid papers, and reviewed what your budget will be for the upcoming four years.  Unfortunately, the life under the student financial aid budget is not very lavish.  First of all, your housing cost are estimated based on students having roommates, and often does not provide enough to cover you living in your own place (for this you may have to cut short in other departments.)  Also, your transportation cost will not take into account a car payment or insurance cost, and is generally in the $200-250 range per month.  Taking all of these factors into account, you can see why it will be important to plan ahead.  I do not advocate working while in medical school, unless it is very limited, and within the field of medicine, where the experience can help build your CV.  But don’t count on it.  I have heard of medical students working in outside industries, but it pays a very heavy toll on your education and grades.  Therefore, as difficult as it may seem, try to live well within your budget.  Living within your means, and having money in your pocket, especially for take out food during late night studying at the library before exams will help you remain focused on doing well in school, and that is extremely important.

Sample Budget

Tuition $29,608/per year

Health Services Fee $480/year

Student Activity fee $60/year

Health Insurance $1,168/year

Books $1000/year

Diagnostic Kit

USMLE Fees $450/year

Apartment Rent and Utilities $7,200/year

Other living expenses (Includes food, clothing, dry cleaning and laundry, summer health services, and apartment insurance) $5,834/year

Transportation (for out of state students, a travel allowance will be included to this amount for one trip home per year) $2700

Stafford loan fees $170/year

Getting a “place”

For most, to stay within your financial aid budget you will need a roommate.  You must examine whether this is feasible for you because, trying to pay less with a roommate, to only loose focus because you can’t get along with your roommate is not a good plan either.  If you have to get your own place because you know what works best for you, so be it, just know then you will have to compensate for this increase in your housing expense by taking out from other areas (miscellaneous, books, etc) .  The best resources for finding a place will usually be made available by your student affairs department.  Also, most Universities will have a housing list that you can browse for listings within your budget (and of out of your budget too).  Here you may find other incoming medical students looking for roommates and you may contact them to coordinate finding a place.  You may also find incoming students or upper classmates who already have a place, and need roommates to help pay the rent.  Bunking with an upper classmate will also be great to gain insight and guidance on the years to come (and hopefully even some books & notes.)  Talk to your admissions or student affairs office, and see what other students have used in the past.

Financial Aid Programs

You obviously must have some experience with financial aid at this point, but here we will provide a brief review of your options for graduate school.  One thing different for most schools is that in addition to completing the FAFSA for federal aid, schools that offer scholarship or other awards based on need, will require all of their students to complete a Need Access application.  This application is through a “non-profit” organization called the access group (www.accessgroup.org.) focused on providing affordable financing for education.  You can download the application from their website, and complete it on the computer.  The processing fee is usually $15 (check their website for the most current rates), and the application once completed can be uploaded online.    You will need to submit information regarding all debts (auto, credit cards, and student loans) and from both of your parents (yup, even if you are over 24 year old unlike the FAFSA, unless you can demonstrate extenuating circumstances, ie death, no biological parent, etc.)

Another aspect to consider is whether your school has a base loan amount.  This usually means that they try to limit the total amount of loans you take out per year, by covering any financial deficit through a scholarship program.  Either way, based on the student budget listed above for your school, you will come up with a total for the year.  This amount is covered by a package of financial aid awards including grants, federal loans (Stafford & Perkins), and scholarship.  These funds are usually dispersed twice a year, so you will also need to learn how to budget your money month to month.

About Federal Loans

There are two types of federal loans for students, Stafford and Perkins loans.  Stafford loans are divided into Subsidized (were the interest on the loan is paid by the government while in school and during deferment), and unsubsidized (you either pay the interest, or it capitalizes to the principle of the loan while you are in school, in deferment or forbearance.)  Keep in mind for later however that this interest that you pay is tax deductible.  Capitalization of interest with unsubsidized loans just means that the interest that you are not paying every month for the year, is added to amount you borrowed (called the principle), creating a new total loan amount every year.  This subsequently leads to paying more interest year to year because interest is calculated as a percentage of the new total loan amount (or the new principle amount) The total amount a student can borrow through a Stafford loan as an UNDERGRADUATE is $23,000, with a combined total for both GRADUATE AND UNDERGRADUATE of $65,000.  Independent students, and those students whose parents are denied a plus loan, the cumulative limits are $46,000 for undergraduate, and $138,500 for graduate students.  The interest rates on Stafford loans are variable (based on 91 day T-bill rate + 1.7% during school with an additional 0.6% increase upon graduation) and are capped at 8.25% or less, depending on yearly adjustments.  Every year in May your financial aid advisor will tell you what the annual interest rate will be one month before it goes into effect.  All lenders of Stafford loans offer the same rate, although some lenders provide discounts for electronic and on-time payments.  You can check out our site online for the most current interest rates, announced every year in May.  We currently offer a loan consolidation program with the lowest rates available, and help our viewers to benefit the most from loan consolidation when the time comes.

Perkins loans are different.  This type of loan is awarded to students with exceptional financial need, based on income reported on the FAFSA, and if you are older than 24, this income does not include your parents.  The school is the lender, using a limited amount of funds provided by the federal government.  At one point, the Perkins loan was considered the best student loan available because the lack of origination or guarantee fees, and it is a subsidized loan (interest paid by the government while in school and during the 9-month grace periods.)  Also, the interest rate on Perkins loans are fixed at 5%, and there is a 10 year repayment period.  Currently, the interest rates for Stafford loans are 2.85% if you consolidate while in school or during the grace period (grace period is the 6 month period after you graduate school,) making it better than the fixed Perkin rates.  However, the Stafford interest rates change every year, and can be as high as 8.25%.  The loan limits for Perkins are $6000 per year for graduate students with a cumulative (undergraduate and graduate) limit of $40,000.  Some institutions may participate in an Expanding Lending Option (ELO) which allows them to offer higher loan limits by $1000 per year, corresponding to a cumulative limit increase of $5,000 for undergrads and $10,000 graduates.  A school must have a default interest rate for the ELO that cannot exceed 15%.

Scholarships

There are many resources to help you find out about available scholarships.  As with all financial aid questions, your best resource will be the financial aid office at your institution.  They will have lots of information regarding types of scholarships students have applied for in the past. In addition to your school’s financial aid department, below are listed some online resources that allow you to search for scholarships that you are eligible to apply for.  The thing about scholarships is that some of the applications may be lengthy, and you must apply far in advance.  However, the free money is certainly worth the effort, and there is a lot of scholarship money floating out there if you really want it.

Military Programs

If you are enrolled in school, you may be eligible to receive a full tuition scholarship, and a monthly living allowance for joining the military.  In return you provide service after residency in the military branch, for the number of years they supplemented your education.  You will be considered in the military, and will have to complete an officer’s boot camp during one of your summers.  Furthermore, you must apply to military residencies, and can only attend a civilian residency if you fail to get a spot in a military residency.  During a military residency you get paid more than civilian resident, on top of having no student loans for medical school, certainly a great combination.  On the flip side, after completion of your military residency you could potentially be stationed anywhere in the world, and a salary that is usually lower than the average civilian salary for the same position.  Also, in war time, there is a likely probability that you will become activated.  In the military however, you can retire and receive a pension and lifetime health benefits in 20 years.  There are certainly positives and negatives to joining the military, more so related to your own person preferences.  The Navy for instance has two programs for health professionals: the Armed Forces Health Professionals Scholarship Program (AFHPSP), and the Financial Assistance Program (FAP).  In the AFHPSP, the Navy provides up to $175,000 or more for up to 4 years of medical schools (including all expenses like books, food housing, etc.), in addition to a monthly stipend of over $1000.  The FAP provides an additional monthly stipend of approximately $1000 for resident physicians (you also keep your regular resident salary) in specialties like Family practice, Orthopedics, Internal Medicine, and General Surgery.   After your training, FAP physicians agree to serve a certain amount of time in the service related to the amount of funding received.  These programs may have changed in detail, and it is advised you review the following websites listed below for the most current information regarding military programs:

Airforce             www.airforce.com

Army                www.goarmy.com

Navy                 www.navy.com

There are also other loan forgiveness programs that will forgive (repay) a percentage of your loan debt, per year of work with their program (National Health Service Corps, etc.)  Again talk to your financial aid department, or search the websites listed below for more information.

Some additional resources include:

www.studentsofmedicine.com/finaid (of course we will list ours first)

www.fafsa.ed.gov

www.finaid.org

www.finaid.org/calculators/finaidestimate.phtml (Expected family contribution estimator)

www.salliemae.com

www.finaid.org/calculators/

www.fastweb.com

Supplemental Loans

Although I do not recommend taking out additional loans, “private” or “supplemental” loans to help supplement your living cost while in school for some is necessary.  The reason I don’t usually advocate these loans, is because it is only more debt, and the interest rates are usually much higher then federal loans.  Unlike guaranteed federal loans, your credit rating will determine whether or not you are eligible for these types of loans, and for what amount.  Loan amounts vary, and I will say that if you do go this route, shop around for the best rates.  If you have taken all of your other federal student loans through a single bank, it might not be a bad idea to inquire that bank about supplemental loans first. 

www.studentsofmedicine.com