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FINANCING YOUR MEDICAL EDUCATION

FINANCING YOUR MEDICAL EDUCATION. TOPICS. THE FINANCIAL AID PROCESS MEDICAL SCHOOL COSTS & BUDGET DETERMINING FINANCIAL AID AWARDS CATEGORIES OF FINANCIAL AID MEDICAL SCHOOL DEBT THE IMPORTANCE OF CREDIT RATING QUESTIONS. FINANCIAL AID APPLICATION PROCESS. O

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FINANCING YOUR MEDICAL EDUCATION

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  1. FINANCING YOUR MEDICAL EDUCATION

  2. TOPICS • THE FINANCIAL AID PROCESS • MEDICAL SCHOOL COSTS & BUDGET • DETERMINING FINANCIAL AID AWARDS • CATEGORIES OF FINANCIAL AID • MEDICAL SCHOOL DEBT • THE IMPORTANCE OF CREDIT RATING • QUESTIONS

  3. FINANCIAL AID APPLICATION PROCESS O C EXPLORE THE FINANCIAL AID APPLICATION PROCEDURES AND DEADLINES T OOBTAIN INSTITUTIONAL APPLICATION FORMS B EBEGIN RESEARCHING THE WEB FOR SCHOLARSHIPS R J A N UFILL OUT THE FAFSA ON THE WEB A R Y MOBTAIN ESTIMATES OF FINANCIAL AID OFFERS FROM ALL SCHOOLS A YMAKE A DECISION AS TO WHICH MEDICAL SCHOOL YOU WANT TO ATTEND

  4. UCSD MEDICAL SCHOOL 2005-06 BUDGET O F F C A M P U S

  5. UCSD MEDICAL SCHOOL 2005-06 BUDGET O N C A M P U S

  6. UCSD MEDICAL SCHOOL 2005-06 BUDGET TOTAL FOR 4 YEARS $175,695 OFF CAMPUS $160,000 ON CAMPUS

  7. PUBLIC VS. PRIVATE MEDICAL SCHOOL COSTS National Average for 2004-05 according to the AAMC Tuition and Fees only

  8. FINANCIAL AID AWARDS • 60% OF THE ENTIRE CLASS WILL RECEIVE SCHOOL BASED FINANCIAL AID PACKAGE. • THE NEEDIEST SCHOOL PACKAGE FOR 2005-06 IS $24,273 ($19,980 GRANT & $4293 SCHOOL LOAN) • THE LOWEST NEED SCHOOL-BASED PACKAGE FOR 2005-06 IS $20,673 ($10,301 GRANT AND $10,372 LOAN)

  9. HOW YOUR AWARDS ARE DETERMINED2005-06 SINGLE STUDENTS PARENTS’ CONTRIBUTION NEED CATEGORY STUDENT IS SINGLE & PARENT’S STUDENT IS SINGLE & PARENT’S CONTRIBUTION IS > $23,887 CONTRIBUTION IS < $23,887 NEED CATEGORY 1 NEED CATEGORY 2 -- 5 STUDENT IS ELIGIBLE FOR STUDENT IS ELIGIBLE FOR FEDERAL STAFFORD LOAN INSTITUTIONAL GRANTS & ONLY LOANS

  10. WHY USE PARENTS’ INCOME AND ASSET INFO? • STUDENTS FROM LOW-INCOME BACKGROUNDS USUALLY ENTER MEDICAL SCHOOL WITH A SUBSTANTIALLY HIGHER DEBT THAN STUDENTS FROM MORE AFFLUENT FAMILIES. • IN GENERAL, STUDENTS FROM AFFLUENT BACKGROUNDS ARE ABLE TO CALL ON THEIR PARENTS FOR FINANCIAL HELP, WHEREAS STUDENTS FROM LOWER INCOME FAMILIES DO NOT HAVE ACCESS TO THIS RESOURCE. • IF LIMITED SCHOOL-BASED FUNDS WERE DISTRIBUTED EVENLY AMONG ALL STUDENTS IN THE SCHOOL, REGARDLESS OF PARENT INCOME, THE AMOUNT OF GRANT AND LOW-INTEREST LOAN MONEY AVAILABLE TO EACH STUDENT WOULD BE SUBSTANTIALLY REDUCED.

  11. HOW YOUR AWARDS ARE DETERMINED2005-06 MARRIED STUDENTS WITHOUT CHILDREN SPOUSE’S NET MONTHLY INCOME NEED CATEGORY STUDENT IS MARRIED & SPOUSE’S STUDENT IS MARRIED, SPOUSE’S NET INCOME IS > $1926/MONTH INCOME < $1926/MONTH NEED CATEGORY 1 NEED CATEGORY 2 STUDENT IS ELIGIBLE FOR STUDENT IS ELIGIBLE FOR FEDERAL STAFFORD LOANS INSTITUTIONAL GRANTS & ONLY LOANS

  12. FINANCIAL AWARD SAMPLESingle student without children EFC = $2083 (Estimated Family/Parent Contribution) Need Category 5 eligible for school aid $19, 980 – School Grant $4293 – School Loan TOTAL $24,273 Budget $42,550 Student Contribution - $1000 Financial Need $41, 550 School Aid - $24, 273 Unmet Need $17, 277 Federal Loans $8,500 Subsidized Stafford ($8500 max) $8,777 Unsubsidized Stafford ($30,000 max) Unmet Need $0

  13. FINANCIAL AWARD SAMPLESingle student without children EFC = $23,900 (Estimated Family/Parent Contribution) Need Category 1 Not Eligible for School Aid $0 Budget $42,550 Student Contribution - $1000 Financial Need $41,550 School Aid - $0 Unmet Need $41,550 Federal Loans - $8,500 Subsidized Stafford - $30,000 Unsubsidized Stafford Unmet Need $3020 Alternative Loans

  14. CATEGORIES OF FINANCIAL AID • INSTITUTIONAL AID • BASED ON STUDENT’S & PARENTS’ INCOME AND ASSETS • INCLUDES GRANTS, SCHOLARSHIPS, FELLOWSHIPS AND LOANS • OUTSIDE GRANTS AND SCHOLARSHIPS • USUALLY RESTRICTIVE IN NATURE • BASED ON FACTORS SUCH AS THE AREA OF RESIDENCE, ETHNICITY, RELIGIOUS AFFILIATION, ETC. • EXAMPLES: NATIONAL MEDICAL FELLOWSHIPS, BECA SCHOLARSHIP, NATIONAL HISPANIC SCHOLARSHIP, THE CHINESE AMERICAN MEDICAL SOCIETY SCHOLARSHIP

  15. CATEGORIES OF FINANCIAL AID • OUTSIDE LOANS • FEDERAL LOANS (SUBSIDIZED AND UNSUBSIDIZED) • HAVE BETTER TERMS THAN THE ALTERNATIVE LOANS • INTEREST CAP AT 8.25% • DON’T REQUIRE CREDIT CHECK • PRIVATE LOANS (THROUGH OUTSIDE LENDERS) • ALTERNATIVE LOANS - REQUIRE CREDIT CHECK • OTHER OUTSIDE AGENCY LOANS - MAY OR MAY NOT REQURE CREDIT CHECKS • CAN’T BE CONSOLIDATED WITH YOUR FEDERAL LOANS

  16. CATEGORIES OF FINANCIAL AID • SERVICE OBLIGATION PROGRAMS • REQUIRE A COMMITMENT TO PRACTICE IN A PARTICULAR FIELD OF MEDICINE OR IN A SPECIFIC GEOGRAPHIC LOCATION • HAVE STIFF PENALTIES FOR DEFAULTING ON THE SERVICE COMMITMENT • EXAMPLES: ARMED FORCES SCHOLARSHIP PROGRAMS, THE NATIONAL HEALTH SERVICE CORPS AND THE PRIMARY CARE LOAN • LOAN REPAYMENT PROGRAMS • PROVIDE BACK-END HELP AFTER GRADUATION FROM MED SCHOOL BY REPAYING ALL OR A PORTION OF A STUDENT’S OUTSTANDING EDUCATIONAL DEBT • MOST ARE TIED TO PRACTICING IN A PARTICULAR AREA OF MEDICINE OR SPECIFIED GEOGRAPHIC LOCATION • EXAMPLES: NATIONAL HEALTH SERVICE CORPS LOAN REPAYMENT PROGRAM, THE CALIFORNIA STATE LOAN REPAYMENT PROGRAM, ETC.

  17. MEDICAL SCHOOL DEBT *ACCORDING TO THE AAMC FOR 2004 **INCLUDES PRE-MATRICULATION DEBT

  18. ESTIMATE OF REPAYMENT LOAN AMOUNT OF $100,000 AT 8.25% INTEREST RATE

  19. CAN I AFFORD THE MONTHLY PAYMENT ON MY SALARY ? AVERAGE ANNUAL SALARY OF FAMILY PRACTITIONER GROSS MONTHLY PAY FOR A SALARY OF $142,000/YEAR MONTHLY LOAN PAYMENT BASED ON 30-40% OF SALARY $142,000 $11,833/MO $3550 - $4733/MO

  20. THE IMPORTANCE OF CREDIT RATING • ALTERNATIVE LOAN PROGRAMS REQUIRE A CREDIT CHECK • LENDER WILL LOOK AT: • DEROGATORY CREDIT • EDUCATIONAL LOAN DEFAULTS • HISTORY OF LATE PAYMENTS ON CONSUMER DEBT

  21. WHAT’S A GOOD CREDIT SCORE? • 800 + EXCELLENT • 750-799 VERY GOOD TO EXCELLENT • 700-749 GOOD TO VERY GOOD • 650-699 FAIR TO GOOD • 600-649 POOR TO FAIR • BELOW 600 VERY POOR TO POOR

  22. HOW TO MAINTAIN GOOD CREDIT? • RETIRE CREDIT CARD DEBT BEFORE ENTERING MEDICAL SCHOOL • OBTAIN A COPY OF YOUR CREDIT REPORT AND CLEAN UP ANY NEGATIVE CREDIT THAT YOU CAN • DON’T BORROW MORE THAN YOU NEED • ALWAYS KNOW EXACTLY HOW YOU WILL REPAY THE DEBT AND HOW IT WILL AFFECT YOUR MONTHLY BUDGET

  23. WHAT TO DO IF DENIED? • OBTAIN AND REVIEW CREDIT REPORT USED IN DECISION PROCESS BY LENDER • CORRECT ANY ERRORS CONTAINED IN REPORT • APPEAL CREDIT DECISION, IF APPROPRIATE • CONSIDER CO-SIGNER OR NON-STUDENT BORROWER AS OPTION, IF AVAILABLE

  24. Contact the Financial Aid Office QUESTIONS???

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