Loan Resources and Debt Management

Types of Aid

Federal Loans

All students who submit the FAFSA are eligible for federal student financial aid, which is administered by the U.S. Department of Education. The University of Washington School of Medicine’s FAFSA priority deadline is January 15.  The University of Washington’s Title IV federal school code is 003798 regardless of which medical school site a student attends. The aggregate limit for all Federal Direct loans is $224,000 for medical students, including any prior subsidized and unsubsidized.

Federal Direct Unsubsidized Stafford Loans are available for graduate and professional students and eligibility is not based on financial need. This loan does accrue interest while you are in medical school. Repayment begins six months after graduation OR if you drop below half-time status (less than 6 credits/quarter) while in medical school. The maximum amount below applies specifically to medical students and is higher than the standard amount for other graduate students.

The Federal Direct Graduate Plus Loan loan is available to graduate or professional students to help pay for education expenses not covered by other financial aid. Eligibility is not based on financial need, however, students must complete a credit check. If you have an adverse credit history, you may need to meet additional requirements in order to qualify.

 

Institutional Loans

All students who submit the FAFSA may also be considered for institutional aid, which is administered by the University of Washington. Funds are limited and may come from federal or university sources.

The Loan for Disadvantaged Students (LDS) program is for disadvantaged students as defined by the Secretary of the Department of Health and Human Services (HHS). SOM Financial Aid will contact eligible students directly.

  • Interest Rate: 5%
  • Maximum amount: Varies based on availability
  • Grace Period: 12 months
  • Loan Servicer: Heartland ECSI

The Primary Care Loan (PCL) loan is also administered by the Department of Education for full-time students pursuing a doctoral degree in allopathic or osteopathic medicine. Students who receive this loan are required to enter and complete residency training in primary care within four years after they graduate and practice primary care for ten years or until they pay off the loan in full, whichever occurs first. SOM Financial Aid will contact eligible students directly.

  • Interest Rate: 5%
  • Maximum yearly amount: Varies based on availability
  • Grace Period: 12 months
  • Loan Servicer: Heartland ECSI

Please view this webpage for PCL FAQs.

The School of Medicine Loan is very limited but may be used at the discretion of the SOM Financial Aid office under special circumstances. SOM Financial Aid will contact eligible students directly.

  • Interest Rate: 5%
  • Maximum amount: Varies based on availability
  • Grace Period: 12 months
  • Loan Servicer: Heartland ECSI

University of Washington Short-Term Loans are available for all currently enrolled students. These emergency funds are typically available in 2-4 business days.

These short term loans can especially be helpful for medical students during their clinical years as clinical students receive their financial aid disbursement the Friday before their first clerkship of the quarter. For students who are starting clerkships partway through the quarter, these short term loans are an option to help cover your expenses until you receive your aid.

Here’s an example schedule detailing when a short term may be helpful:

DateStudent A
Clerkship starts Sept. 21
Student B
Clerkship starts Oct. 16
Student C
Clerkship starts Oct. 16
Wednesday, Sept. 16Short term loan application submitted
Friday, Sept. 18Aid received
Monday, Sept. 21
(First Day of Autumn Quarter)
First day of clerkshipShort term loan received (approx.)
Friday, Oct. 16Aid receivedAid received & short term loan repaid
Monday, Oct. 19First day of clerkshipFirst day of clerkship

To apply, please complete the application through MyUW and under Personal Services, select “Short-Term Loan Application.”

  • Origination Fees: $30
  • Interest Rate: 0%
  • Maximum Amount: $3,200
  • Repayment: Due by the next quarter, or whenever additional financial aid funds arrive on account (whichever comes first)

For more information, please visit this webpage.

 

Private Loans

Costs related to residency interviews and ERAS may be eligible for additional Graduate Plus loans and should be utilized before private loans. These include:

  • ERAS and SF Match application fees
  • Residency interview travel costs:
    • Plane flights
    • Hotel rooms
    • Taxis or Lyft/Uber rides (financial aid usually cannot cover car rentals)

To add these costs to your loans, submit a Revision Request including receipts.

If you’ve maxed out your Graduate Plus loans, private loans are also available to cover both residency interview costs and residency relocation costs during your fourth year. These loans can be taken out prior to starting interviews. They are not certified by the school, except to verify that you are graduating, and the loan funds are sent directly to you. If you apply for one of these loans make sure you select the Residency loan and not an Alternative loan. Below is a partial list of lenders that offer private loans to cover residency interview and residency relocation costs:

 

Grants

There are state grants available to Washington residents of a variable amount for each year of medical school. Students must be receiving financial aid and demonstrate financial need to be eligible for the grant and will automatically be considered when awards are processed.

If you are a Washington student and did not receive the state grant on your award, you may update your status if you reported an income on the FAFSA and will no longer have that income during your enrollment in medical school.

To update your status, you will need to complete a Change in Financial Situation – Student form. It is updated annually in March for the next academic year. The 2020-21 academic year form can be found on this webpage under Graduate Forms, Revisions, select “Change in Financial Situation-Student”.

The state grant amount changes each year but for 2020-21, eligible students received $4500.

 

Managing Debt During Medical School

Before receiving loans for the first time, you must complete the following steps:

  1. Sign Master Promissory Note (MPN)
  2. Complete Entrance Counseling through the Department of Education
  3. Complete any paperwork requested by the University of Washington, if assigned

Students must complete both steps in order for aid to be disbursed. You will be notified via the Messages tab on MyUW “Financial Aid Status” page that you need to complete these one-time tasks. Unsubsidized loans and Graduate Plus loans have different promissory notes and we recommended students save copies of your signed MPN’s.

All students enrolled full-time will receive their financial aid package on a quarterly basis. For a detailed breakdown of budgets as well as disbursement timelines, please view those webpages.

If you choose not to accept your full aid package, SOM Financial Aid will automatically disburse the Unsubsidized Stafford first because it has the lowest interest rate.

Students may receive up to their cost of attendance in federal aid. Unfortunately, we are limited regarding in providing additional funds beyond this amount. Our office recommends creating a personal budget to help manage expenses. If you’d like assistance creating or managing your budget, please book an appointment with a Financial Aid counselor.

Certain eligible expenses can be added to the cost of attendance and will often require additional paperwork. Health insurance premiums and non-elective medical costs not covered by insurance, vision, and dental can be added if students submit a Revision Request. Whether or not students are eligible for additional expenses, please contact SOM Financial Aid if you are struggling financially.

Students are not required to accept their full aid package. We strongly encourage students to only borrow the amount they need to pay for living expenses during medical school. Prior to receiving your quarterly disbursement, please email somfao@uw.edu if you’d like to reduce your aid.

You can also return and repay aid after receiving your quarterly disbursement. However, this needs to be done within 30 days of receiving the disbursement so as not to accrue interest.

In May, the Department of Education announces the interest rates for all federal student loans for the following academic year. Our office will send a message to all student listservs notifying you of the change.

Depending on whether interest rates go up or down, there are different strategies you should employ to decrease your overall debt:

  • If the interest rate goes up, it is in your best interest to borrow more money in the current academic year, as it becomes more “expensive” in July.
  • If the interest rate goes down, it is in your best interest (if possible) to wait to borrow more money in the next academic year as it will become “cheaper” in July.

COVID-19 Update: Interest rates are currently at their lowest point in many years. If you have not borrowed the full amount you are eligible for in the 2020-21 academic year and plan on borrowing money during future academic years, it is strongly advised that you borrow the full amount in 2020-21 during Spring Quarter to take advantage of the low-interest rates. Please contact SOM Financial Aid with any additional questions.

 

Managing Debt After Graduation

Repayment

As your medical school graduation approaches, it is important to maintain contact with your loan servicers. Federal student loan balances and lender information is available at Federal Student Aid.

UW’s loan servicer is Heartland ECSI (formerly Campus Partners). They provide billing, accounting, and data processing services for Federal Perkins and institutional loans.

Oftentimes, students need to take out multiple loans to finance their undergraduate and medical education. Upon graduation, you’ll have the option to consolidate certain federal student loans into one new loan with a single monthly payment. This is not often necessary for medical students, though can be situationally useful when considering Public Service Loan Forgiveness (PSLF) and/or your loans have multiple servicers and you wish to make only one monthly payment.

These are the loan types currently eligible for consolidation:

  • Federal Perkins/NDSL
  • HPSL
  • HEAL
  • LDS
  • Federal Direct Subsidized/Unsubsidized Stafford
  • Federal Direct Graduate Plus
  • FFEL Subsidized/Unsubsidized
  • FFEL Parent/Graduate PLUS
  • SLS/ALAS

If you choose to consolidate your loans, the interest will be the weighted average on your existing loans rounded up to the next one-eighth of one percent. Your repayment period will depend on the size of your consolidated loan and may be up to 30 years.

Consolidation may be a good option for some students as it can decrease the amount of your monthly repayments. However, it will increase the total amount of interest you pay overall. For more detailed information about consolidating your specific loans, please contact your lender.

Private loans are available to help cover residency relocation costs. These loans are not certified by the school, except to verify that you are graduating, and the loan funds are sent directly to you. If you apply for one of these loans make sure you select the Residency loan and not an Alternative loan. We cannot add residency relocation costs you incur after graduation to your financial aid award.

AAMC Resources on Private Loans:

Below is a partial list of lenders that offer private loans to cover residency relocation costs:

There are seven loan repayment options available for medical students. There is no one “best” plan and careful consideration should be placed in choosing a repayment plan that works best for your lifestyle and financial goals. The most commonly selected repayment options for medical students are PAYE, REPAYE, IBR, or forbearance.

The AAMC has created excellent resources to help you understand your loan repayment options. Please visit this webpage for more information about Traditional Repayment Plans and Income-Driven Repayment plans.

Traditional Repayment Plans (not often selected by MD graduates):

  • Standard Repayment
  • Extended Repayment
  • Graduated Repayment

Income-Driven Repayment Plans:

  • Pay As You Earn Repayment (PAYE)
  • Revised Pay As You Earn Repayment (REPAYE)
  • Income-Based Repayment (IBR)
  • Income-Contingent Repayment (ICR) (not often selected by MD graduates)

Additional AAMC Resources:

The Public Service Loan Forgiveness Program (PSLF) was established in 2007 to forgive federal student loans for borrowers who work for certain, public service employers. The information below is from the Department of Education. For more information about the program as well as qualifying payments, repayment plans, and employers, please visit the PSLF website.

“The PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.

To qualify for PSLF, you must

  • be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization;
  • work full-time for that agency or organization;
  • have Direct Loans (or consolidate other federal student loans into a Direct Loan);
  • repay your loans under an income-driven repayment plan; and
  • make 120 qualifying payments.”

The AAMC’s Repayment and Loan Forgiveness/Scholarship (RAFLS) website includes a searchable database with many state and federal programs available to medical professionals. This resource is non-exhaustive but a good place to start researching available loan forgiveness programs.

 

Graduating Student Support

SOM Financial Aid is here to support you as you choose the repayment plan that best fits your financial goals. Leading up to graduation, we offer several opportunities to connect with our office for personalized advice.

Hosted by Julie Fresne, Director of Student Financial Services for the AAMC. Julie has over 20 years of medical student loan and education debt management experience, both on the lender and loan servicer sides.

Every year, Julie Fresne hosts a loan repayment webinar for the graduating MS4s. Information for 2022 graduates will be available in Winter Quarter 2022. We strongly encourage you to attend the webinar live so you can ask her your questions.

The Department of Education requires all students to complete federal Exit Counseling. You’ll be notified by the federal government when it is time for you to complete this, so make sure your contact information is current and updated.

SOM Financial Aid counselors are also available to provide 30-minute exit interviews with graduating students. We strongly encourage all students with more than $100,000 of debt to meet with a counselor. Appointments will be available for the Class of 2022 starting in February.

 

Additional Resources

Below we’ve included the most used and helpful resources for medical students. Please contact our office anytime you have questions or concerns about your finances. We are here to help!

AAMC FIRST (Financial Information Resources, Services, Tools) should be your most used resource throughout medical school. The AAMC FIRST website offers a full range of resources for applicants, current medical school students and residents. Their goal is to help medical school borrowers expand their financial literacy, make smart decisions about student loans, and manage their student debt wisely. They also have a library of video resources and offer monthly webinars.

The Med Loans Organizer & Calculator (MLOC) “was developed to assist medical students and residents with managing their education debt. The MLOC provides a secure location to organize and track student loans while also displaying possible repayment plans and costs based on the borrower’s student loan debt.”

As a fourth-year student, you’ll review your MLOC during your One-on-One SOMFAO Exit Interview with a Finacial Aid counselor. Our office strongly recommends students update MLOC at least once a year starting in your second year.  

Federal Student Aid is the Department of Education’s central database for student aid. The loan management system receives data from schools, guaranty agencies, the Direct Loan program, and other Department of Education programs. It provides a centralized, integrated view of Title IV loans and federal grants so that recipients can access and inquire about their loan and/or grant data.