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View Full Version : fossildoc's guide to finding a med school: #2 - loans



fossildoc
07-26-2007, 08:43 PM
Med school is not just for rich kids. Loans are an important component of every school's offerings.

But even rich kids -- at least those from the U.S. -- should be interested in loans. Why? Because every state in the U.S., plus the federal government, has a "loan forgiveness" or "loan repayment" program in which the government pays off the loan if you agree to work in doctor-starved areas. Why spend your own money when you can use OPM (other people's money)?

There's a less well-known reason why loans are important. The major lenders or loan originators, like fannie mae and TERI, are beginning to scrutinize med schools due to the increasing default rate. In other words, bad schools graduate students who can't pass licensing tests and therefore cannot repay their debts. TERI has been especially aggressive about this of late. The availability of TERI loans is some indicator of a school's quality. More importantly, if a school has recently lost its TERI funding, that is definitely a bad sign and should be investigated.

Some schools advertise that their loans are only available with a co-signer. Don't be turned off by this if you don't want a co-signer; you just need to dig a little deeper. The school's administrative loan apparatus may be set up for just one flavor of loan, but the lender may actually have many other options. Take a look at the fannie mae loan web site for a bewildering array of options that you won't see mentioned on any school's web site.

New schools may have no loans at all simply because they are new, and lenders won't accomodate them. I've seen two school strategies for handling this, both in Belize: one keeps tuition at a basement level so that students can afford it, but when the loans come on line, tution will increase. The other school is allowing students to attend without paying any tuition at all, but they must sign a promissory note that they will pay when funding is available. So be creative if you don't find what you want, and be wary if the school has lost previous loan sources.







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