Options for a Medical School Loan Consolidation
In Debt from All That Learning?
Medical school students bear the brunt of high student loan debt. Students may carry multiple loans from federal, state and private sources. Luckily medical school graduates find jobs quickly and easily and shortages of well-trained doctors remain high in many underserved areas. However, med school grads still face years of high student loan debt.
Medical school loan consolidation is directly relative to the types of loans available to med students. Consolidation loans come in two flavors: federal and private to reflect the available loan sources.
Consolidate Federal Medical School Loans
Federal Consolidation is available through the Direct Federal Student Loan Program or the Federal Family Education Loan Program (FFELP). The former is a direct loan program through the U.S. Department of Education and the latter is widely available through student loan providers and lenders licensed to guarantee the federal loan program.
- Med students would likely have a boatload of Stafford and Grad PLUS Loans that would make them eligible to apply for a federal consolidation loan. Finance a Direct Consolidation Loan if you have at least one Federal Direct student loan, or have been turned down for a FFELP consolidation through a private lender. The Direct Consolidation Loan provides the most flexibility for borrowers: no minimum amount to borrow, no credit check and no fees.
- If you have FFELP Loans you may apply for the Federal Consolidation Loan through your primary lender or shop for another that welcomes outside borrowers. Interest rates are fixed per the federal government; they may not exceed 8.25 and are calculated based on the weighted average of your federal loans on the date you consolidate. You are not subject to credit check or frivolous fees. However, shop carefully for lender-specific incentives such as interest rate deductions for on-time payments, applications received during your new-grad grace period, and for automatic payment deductions plans.
Consolidate Specialty Medical School Loans
Perhaps even more so than other college students, medical student loans from federal sources would fall considerably short of covering the cost of tuition. Private medical school loans and private graduate school loans are more highly targeted alternative student loans designed for the needs of medical students. Specialty medical loans are credit-based loans bundled with high credit limits and competitive loan rates. They are available through a growing list of private lenders, including Citibank, Wachovia, Wells Fargo, and many others.
Medical school graduates interested in consolidating private medical school loans must seek out a private student consolidation loan with a lender. You should check first through your primary lender for the options available with their consolidation loan. You will be required to have good credit, or apply for a loan with a creditworthy co-borrower. Interest rates are typically variable and adjusted quarterly. Other terms include loan fees, loan limits, loan minimums and a number of repayment options.
The Association of American Medical Colleges (AAMC) offers medical students the MEDLOANS program. MEDLOANS is managed by Sallie Mae and includes medical student loan packages as well as a consolidation loan.
