Week 14 Financial Aid Kent L. Barrus Pre-professional Advisor

Bio Professional School Preparation The only thing more expensive than education is ignorance. -Benjamin Franklin

Bio Professional School Preparation Why talk about financial aid? Indebted Medical School Graduates, Class of 2003 Indebted Medical School Graduates, Class of 2003PublicPrivateAllMean $ (+6.4%) $129,392 (+4.5%) $109,457 (+5.4%) Median $100,000 (+8.7%) $135,000 (+6.3%) $105,500 (+5.5%) Percent at $100,000 or higher 51.7%67.8%58% Percent at $150,000 or higher 13.2%44.2%25.4% Percent at $200,000 or higher 2.8%14.8%7.5% Percent of Graduates with Debt 84%79.4%82.1%

Bio Professional School Preparation Figuring Out Costs True Costs True Costs Tuition and Fees Tuition and Fees Public Schools and Residency Public Schools and ResidencyResidency The Budget The Budget Calculated by the school’s financial aid office Calculated by the school’s financial aid office Calculated by the school’s financial aid office Calculated by the school’s financial aid office Modest enough to prevent over borrowing, but adequate enough to recognize realistic costs. Modest enough to prevent over borrowing, but adequate enough to recognize realistic costs. Costs listed are ‘average’ costs. Costs listed are ‘average’ costs. Used for financial aid awards. Used for financial aid awards.

Bio Professional School Preparation Figuring Out Costs What is not in the budget What is not in the budget Family Expenses Family Expenses Optional Equipment Optional Equipment Cars Cars Relocation Relocation Preexisting debt Preexisting debt Residency Interview Residency Interview

Bio Professional School Preparation Applying for Financial Aid FAFSA (Free Application for Federal Student Aid) FAFSA (Free Application for Federal Student Aid) FAFSA Used to create a needs analysis Used to create a needs analysis Other forms Other forms Individual schools financial aid application Individual schools financial aid application Prior Year’s IRS 1040 form Prior Year’s IRS 1040 form Divorced/separated parent statement Divorced/separated parent statement Scholarship and outside award documentation Scholarship and outside award documentation Federal verification form. Federal verification form. And others….. And others…..

Bio Professional School Preparation Federal Methodology Basic Guidelines Basic Guidelines Cost of Attendance – Family Contribution = Financial Need Cost of Attendance – Family Contribution = Financial Need Dependent vs Independent? Dependent vs Independent? U.S. Department of Education funding U.S. Department of Education funding You are considered independent. You are considered independent. U.S. Department of Health and Human Services Funding U.S. Department of Health and Human Services Funding You are considered dependent You are considered dependent No matter how old you are No matter how old you are No matter if you even have had contact with your parents No matter if you even have had contact with your parents You do have the option of not providing parental information, but you will be forfeiting your ability to apply for certain loans. You do have the option of not providing parental information, but you will be forfeiting your ability to apply for certain loans.

Bio Professional School Preparation Applying for Financial Aid Don’t underestimate the time to complete or process a financial aid application. Don’t underestimate the time to complete or process a financial aid application. If you need money for school, it is just as important to stay on top of the process of applying for financial aid as it is to manage all the steps required for getting admitted. If you need money for school, it is just as important to stay on top of the process of applying for financial aid as it is to manage all the steps required for getting admitted.

Bio Professional School Preparation Free Money Scholarships for Disadvantaged Students (SDS) Scholarships for Disadvantaged Students (SDS) Federal funding based on a schools definition of disadvantaged Federal funding based on a schools definition of disadvantaged Institutional Funds Institutional Funds Scholarships or grants available from the school you attend. Scholarships or grants available from the school you attend. Some scholarships are overall and lower the cost of tuition of all students. Some scholarships are overall and lower the cost of tuition of all students.

Bio Professional School Preparation Free Money Scholarships for Service Scholarships for Service National Health Service Corps (NHSC) National Health Service Corps (NHSC) Loan repayment plan. Loan repayment plan. Established to encourage health practitioners to work in rural underserved areas. Established to encourage health practitioners to work in rural underserved areas. Armed Forces Health Professions Scholarships. Armed Forces Health Professions Scholarships. Army, Navy, Air Force Army, Navy, Air Force Pays for everything. Pays for everything. Required to spend 45 days on active duty during medical school. Required to spend 45 days on active duty during medical school. Required to serve one year of active duty for every year of program funding. Required to serve one year of active duty for every year of program funding. Minimum of three years payback. Minimum of three years payback.

Bio Professional School Preparation Free Money Army National Guard Army National Guard Scholarships ranging from $2,800 to $6,000 per year. Scholarships ranging from $2,800 to $6,000 per year. Must participate in 16 hours of training a month and 2 weeks a year. Must participate in 16 hours of training a month and 2 weeks a year. May be called to active duty. May be called to active duty. Scholarships for Native Americans Scholarships for Native Americans Covers all costs. Covers all costs. Must document you are child of a tribal member. Must document you are child of a tribal member. Service obligation of two years. Service obligation of two years. Private Donor Funding Private Donor Funding Religious Affiliation, College Attendance, Ethnicity, etc. Religious Affiliation, College Attendance, Ethnicity, etc.

Bio Professional School Preparation Scholarship Search Services The internet and federal government provide scholarship information. The internet and federal government provide scholarship information. Never pay for scholarship searches Never pay for scholarship searches Free Services Free Services College board College board College board College board Fast Web Fast Web Fast Web Fast Web Scholarship Research Network Express Scholarship Research Network Express Scholarship Research Network Express Scholarship Research Network Express Wired Scholar Wired Scholar Wired Scholar Wired Scholar

Bio Professional School Preparation Borrowing the Money Federal Loan Program Federal Loan Program Lower interest rates. Lower interest rates. Lower fees. Lower fees. Defined deferment provisions. Defined deferment provisions. To be eligible you must: To be eligible you must: Be a citizen of the US Be a citizen of the US Be enrolled at least half time Be enrolled at least half time Be in good academic standing Be in good academic standing Not be in default of any previous loans Not be in default of any previous loans Show financial need based on FAFSA. Show financial need based on FAFSA.

Bio Professional School Preparation Borrowing the Money Federal Stafford Loans Federal Stafford Loans Subsidized or unsubsidized Subsidized or unsubsidized Subsidized requires financial need criteria be met. Subsidized requires financial need criteria be met. Deferment of interest and principle until after graduation for subsidized. Deferment of interest and principle until after graduation for subsidized. Deferment of principle only for unsubsidized Deferment of principle only for unsubsidized Borrowing Limit – Maximum of $8,500 per year for subsidized or $38,500 per year for unsubsidized. Total cumulative maximum of $189,125. Borrowing Limit – Maximum of $8,500 per year for subsidized or $38,500 per year for unsubsidized. Total cumulative maximum of $189,125. Interest rate may not exceed 8.25% Interest rate may not exceed 8.25% Apply through your school of acceptance. Apply through your school of acceptance.

Bio Professional School Preparation Borrowing the Money William D. Ford Federal Direct Loan. William D. Ford Federal Direct Loan. Similar to Stafford, but loan is originated from schools and not from Banks. Similar to Stafford, but loan is originated from schools and not from Banks. Three options for repayment: Three options for repayment: Standard Repayment Standard Repayment Extended Repayment Extended Repayment Income Contingent Repayment Income Contingent Repayment Graduated Repayment Graduated Repayment

Bio Professional School Preparation Borrowing the Money Federal Perkins Student Loan Federal Perkins Student Loan Based on financial need through FAFSA Based on financial need through FAFSA Maximum of $6,000 per year with a cumulative total of $40,000 Maximum of $6,000 per year with a cumulative total of $40,000 Interest rate currently at 5% and does not accrue during school years. Interest rate currently at 5% and does not accrue during school years. Ten year repayment to the school. Ten year repayment to the school. Not all schools participate in Perkins loans. Not all schools participate in Perkins loans.

Bio Professional School Preparation Borrowing the Money Industry Specific Loans Industry Specific Loans Medical School Medical School Loans for Disadvantaged Students (LDS) Loans for Disadvantaged Students (LDS) 5% loan 5% loan Tuition plus $2,500 per year. Tuition plus $2,500 per year. Primary Care Loans (PCL) Primary Care Loans (PCL) 5% loan 5% loan Tuition plus $2,500 per year. Tuition plus $2,500 per year. If you don’t choose primary care, the interest increases to 12%. If you don’t choose primary care, the interest increases to 12%. Loan Repayment Forgiveness Programs Loan Repayment Forgiveness Programs National Health Service Corps Loan Repayment National Health Service Corps Loan Repayment Indian Health Service Loan Repayment Indian Health Service Loan Repayment Department of Defense Financial Assistance Program Department of Defense Financial Assistance Program State Loan Repayment Programs State Loan Repayment Programs

Bio Professional School Preparation Borrowing the Money Industry Specific Loans Industry Specific Loans Medical School Medical School Private Loans Private Loans American Express Educational Loans American Express Educational Loans AAMC MEDLOANS AAMC MEDLOANS

Bio Professional School Preparation Borrowing the Money Industry Specific Loans Industry Specific Loans Dental School Dental School Federally Funded Scholarships Federally Funded Scholarships National Health Service Corps National Health Service Corps Armed Forces Health Professions Scholarships Armed Forces Health Professions Scholarships National Institute of Dental and Craniofacial Research (NIDCR) National Institute of Dental and Craniofacial Research (NIDCR) Privately Funded Scholarships Privately Funded Scholarships ADEA/Listerine Preventative Dentistry Scholarships ADEA/Listerine Preventative Dentistry Scholarships ADA Scholarships ADA Scholarships Many others…. Many others….

Bio Professional School Preparation Debt Management Step One: Calculate your monthly payments Step One: Calculate your monthly payments Use a loan repayment calculator on the internet. Use a loan repayment calculator on the internet. Use the AAMC book ‘Financial Planning and Management Manual for U.S. Medical Students.’ Use the AAMC book ‘Financial Planning and Management Manual for U.S. Medical Students.’ Use other web resources Use other web resources Use other web resources Use other web resources Use yet another web resource Use yet another web resource Use yet another web resource Use yet another web resource And one more And one more And one more And one more

Bio Professional School Preparation Final Words Use the schools financial aid office. They exist to serve you. Use the schools financial aid office. They exist to serve you.