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 C EXPLORE THE FINANCIAL AID APPLICATION PROCEDURES AND DEADLINES T O OBTAIN INSTITUTIONAL APPLICATION FORMS B E BEGIN RESEARCHING THE WEB FOR SCHOLARSHIPS R J A N U FILL OUT THE FAFSA ON THE WEB A R Y M OBTAIN ESTIMATES OF FINANCIAL AID OFFERS FROM ALL SCHOOLS A Y MAKE A DECISION AS TO WHICH MEDICAL SCHOOL YOU WANT TO ATTEND

UCSD MEDICAL SCHOOL BUDGET DESCRIPTION FIRST YEAR BOOKS$1,107 RENT/UTILITIES ($917/MO) $8,712 FOOD($349/MO)$3,316 MISC./PERSONAL ($348/MO) $3,306 TRANSPORTATION ($368/MO) $3,496 EQUIPMENT BAG $1,263 MICROSCOPE$150 REGISTRATION FEES $26, TOTAL$48,319 OFF CAMPUSOFF CAMPUS

PUBLIC VS. PRIVATE MEDICAL SCHOOL COSTS PUBLICPRIVATEUCSD $25,208$42,906$26,969 National Average for according to the AAMC Resident Tuition, Fees & Health Insurance

FINANCIAL AID AWARDS 60% OF THE ENTIRE CLASS WILL RECEIVE SCHOOL BASED FINANCIAL AID PACKAGE. THE NEEDIEST SCHOOL PACKAGE FOR FOR THE 1 ST YEAR CLASS IS $27,577 ($22,293 GRANT & $5,284 SCHOOL LOAN) THE LOWEST NEED SCHOOL-BASED PACKAGE FOR IS $23,977 ($11,122 GRANT AND $12,855 LOAN)

HOW YOUR AWARDS ARE DETERMINED SINGLE STUDENTS PARENTS’ CONTRIBUTION NEED CATEGORY STUDENT IS SINGLE & PARENT’S CONTRIBUTION IS >= $27,066CONTRIBUTION IS < $27,066 NEED CATEGORY 1NEED CATEGORY STUDENT IS ELIGIBLE FOR FEDERAL DIRECT LOAN &INSTITUTIONAL GRANTS & OUTSIDE LOANS ONLYLOANS

WHY USE PARENTS’ INCOME AND ASSET INFO? 1. STUDENTS FROM LOW-INCOME BACKGROUNDS USUALLY ENTER MEDICAL SCHOOL WITH A SUBSTANTIALLY HIGHER DEBT THAN STUDENTS FROM MORE AFFLUENT FAMILIES. 2. 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. 3. 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.

HOW YOUR AWARDS ARE DETERMINED MARRIED STUDENTS WITHOUT CHILDREN SPOUSE’S NET MONTHLY INCOME NEED CATEGORY STUDENT IS MARRIED & SPOUSE’SSTUDENT IS MARRIED, SPOUSE’S NET INCOME IS > $2,183/MONTHNET INCOME < $2,183/MONTH NEED CATEGORY 1NEED CATEGORY 2 STUDENT IS ELIGIBLE FOR FEDERAL DIRECT LOANS &INSTITUTIONAL GRANTS & OUTSIDE LOANS ONLYLOANS

FINANCIAL AWARD SAMPLE Single student without children EFC = $2310 (Estimated Family/Parent Contribution) Need Category 5 eligible for school aid $22,293 – School Grant $ 5,284 – School Loan TOTAL$27,577 Budget $48,319 Student Contribution - $ 1,000 Financial Need$47,319 School Aid - $27,577 Unmet Need $19,742 Federal Loans $8,500 Subsidized Direct ($8500 max) $11,242 Unsubsidized Direct ($32,000 max) Unmet Need $0

FINANCIAL AWARD SAMPLE Single student without children EFC = $27,100 (Estimated Family/Parent Contribution) Need Category 1 Not Eligible for School Aid$0 Budget $48,319 Student Contribution - $1000 Financial Need$47,319 School Aid - $0 Unmet Need $47,319 Federal Loans - $8,500 Subsidized Direct - $32,000 Unsubsidized Direct Unmet Need $6,819 Graduate PLUS Loan

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

CATEGORIES OF FINANCIAL AID OUTSIDE LOANS FEDERAL LOANS (SUBSIDIZED, UNSUBSIDIZED AND GRADUATE PLUS LOANS ) HAVE BETTER TERMS THAN PRIVATE/ALTERNATIVE LOANS INTEREST RATE 6.8% FOR DIRECT; 7.9% FOR GRAD PLUS DIRECT DOES NOT REQUIRE CREDIT CHECK PRIVATE LOANS (THROUGH OUTSIDE LENDERS) ALTERNATIVE LOANS - REQUIRE CREDIT CHECK OTHER OUTSIDE AGENCY LOANS - MAY OR MAY NOT REQURE CREDIT CHECKS CANNOT BE CONSOLIDATED WITH YOUR FEDERAL LOANS

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, NIH LOAN REPAYMENT PROGRAMS (FOR STUDENTS INTERESTED IN RESEARCH)

MEDICAL SCHOOL DEBT AVERAGE ALL SCHOOLS $156,456 AVERAGE PUBLIC SCHOOLS $148,101 AVERAGE PRIVATE SCHOOLS $170,012 AVERAGE UCSD $109,119 *ACCORDING TO THE AAMC FOR 2009 **INCLUDES PRE-MATRICULATION DEBT

ESTIMATE OF REPAYMENT REPAYMENT PERIOD TOTAL PAID IN FORBEARANCE (assume 4 year residency) TOTAL PAID IN REPAYMENT TOTAL PAID OVERALL MONTHLY PAYMENT IN REPAYMENT 10 YEARS PAYMENT BEGINS AFTER GRADUATION $172,621$172,621$1, YEARS $34,000 OR $708/MO $199,729$233,728$1, YEARS $34,000 OR $708/MO $260,277$294,277$868 LOAN AMOUNT OF $125,000 AT 6.8% INTEREST RATE

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 10% --15% OF SALARY $150,000 $12,500/MO $1250/MO— $1875/MO

THE IMPORTANCE OF CREDIT RATING THE GRAD PLUS LOAN PROGRAM REQUIRES A CREDIT CHECK A GRAD PLUS APPLICANT IS CONSIDERED TO HAVE ADVERSE CREDIT IF: APPLICANT IS 90 DAYS OR MORE DELINQUENT ON THE PAYMENT OF ANY DEBT APPLICANT HAD ANY DEBT DISCHARGED IN BANKRUPTSY ANY TIME IN THE LAST FIVE YEARS THE APPLICANT HAS BEEN THE SUBJECT OF A DEFAULT DETERMINATION ON ANY DEBT, FORECLOSURE, A TAX LIEN, A REPOSSESSION, A WAGE GARNISHMENT, OR A WRITE-OFF OF A TITLE IV DEBT ANY TIME DURING THE LAST FIVE YEARS

WHAT’S A GOOD CREDIT SCORE? EXCELLENT VERY GOOD TO EXCELLENT GOOD TO VERY GOOD FAIR TO GOOD POOR TO FAIR BELOW 600VERY POOR TO POOR

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

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

QUESTIONS??? Contact the Financial Aid Office