Financing medical school is a major undertaking, and one that students should take seriously: in 2015, med school graduates took an average of $180,000 in student loan debt home with their diplomas.
Most students end up taking out loans to finance their education, so here are three tips to get to you to graduation day with the least possible debt.
1. Do your homework early
Before even applying to schools, look into your financing options. Financial aid availability will vary from school to school, so sit down with financial aid officers to get a feel for what kind of financial situation you could realistically be getting yourself into. What percentage of students receive financial aid? What’s the average scholarship awarded? How much debt do graduates typically accumulate? Gather your data ahead of time so you can make a confident decision when the time comes.
You will also want to figure out what kind of help you might be getting from family or what you will be able to contribute financially. These facts will give financial aid officers a better overall look at your situation, and they should be able to estimate an award based on financial need. If it comes down to a couple schools, comparing ahead of time this way will help you make the best decision.
2. Get familiar with loans
Once you know where you’re going and about what it’ll cost you, you’ll likely still need a loan. First of all, the better your credit is, the better your odds of getting a private loan for school. Do your best to pay off existing debts and bump up your score as much as you can.
When you’re comparing loans, you’ll look at interest rates, accrual while you’re in school, deferment and payment plans, among other variables. Really look into each option here, because the loan with the cheapest monthly payment might not be best for you. You can look at an online calculator to give you a better of actual payments down the road.
While you’re in school, see if you can afford to pay the interest as you go along to keep it under control. Just making those small payments regularly can save you thousands down the line.
If you’re out of medical school and chipping away at your loans, don’t overlook refinancing. This would allow you to work with a new loan company that could re-package your loans at a lower interest rate. Over time, the difference between a few percentage points could equal serious cash.
3. Look into scholarships
As a medical school student, there are several options for scholarships and loan repayment programs. Here are some to look into:
- – Armed Forces Health Professions Scholarship Program (HPSP) – Prospective military doctors can receive a paid military education with the U.S. Army, U.S. Navy and U.S. Air Force. Scholarships range from one to four years, and during that time the student’s expenses are covered in exchange for their service.
- – National Health Service Corps (NHSC) – NHSC members provide health care to underserved communities and receive loan forgiveness or scholarships in exchange for their service.
- – Public service loan forgiveness – This is a program that will forgive up to about $60,000 of your loans for your service with a nonprofit or public employer. It is best for students who will still have a high amount of loans remaining after 10 years, so crunch the long-term numbers to see if this is right for you. There is a more in-depth guide to your options here.
Preparing for your medical school financing now will help you avoid sticker shock when you receive the first loan bill. But it can also help shave thousands of dollars off your overall costs, putting you in a more solid financial position when you graduate.