Our graduates' average medical school debt load is more than $25,000 below the mean when compared with debt load for all medical school graduates.
Source: AAMC FASR 2013-14
At the University of Michigan Medical School, students have access to many institutional and federal loan programs. Loans available to medical school students vary in maximum amounts allowed, interest rates and repayment terms.
Private loans are also an option for students, though these are not administered through the Financial Aid Office.
Overview of Federal Programs
Financial information submitted on the FAFSA is used to determine eligibility for all federal loan programs.
Some important details about major federal loans:
Federal Perkins Loan
- Need-based campus federal loan program.
- 5 percent interest rate.
- Eligibility is based on expected family contribution (EFC) determined by funding levels.
- Repayment starts after a 9-month post-graduation grace period.
- Maximum yearly award is $8,000.
- Interest does not accrue until repayment begins.
- Maximum repayment of 10 years.
Loans for Disadvantaged Students (LDS)
- Long-term 5 percent federal loan that is offered to students from disadvantaged backgrounds, as defined by the U.S. Department of Health and Human Services.
- Eligibility is based on expected family contribution (EFC).
- Repayment begins one year after student is no longer enrolled full-time.
- Repayment is deferrable throughout residency training.
Primary Care Loan (PCL)
- The University of Michigan is a participating medical school.
- Federal loan program available only to selected students who agree to commit to a primary care residency and practice as defined the U.S. Department of Health and Human Services.
- Maximum repayment is 25 years after a 12-month grace period.
- Payments are deferrable throughout residency training.
- Effective March 23, 2010, only student information is used to determine eligibility.
- Borrowers receiving a Primary Care Loan on or after March 23, 2010, are required to enter and complete residency training in primary health care and practice in primary health care for 10 years (including years spent in residency training) or through the date on which the loan is repaid in full, whichever happens first.
- Borrowers who receive a Primary Care Loan on or after March 23, 2010, and who don’t comply with the service requirements of the program will have their loans begin to accrue at a rate of 2 percent per year greater than the rate at which the student would pay if following the service requirements. For example, the regular rate is currently 5 percent per year, so the service default rate would be 7 percent per year.
Federal Direct Unsubsidized Loans
These are low-interest loans available from the U.S. Department of Education and administered by our office.
William D. Ford Federal Direct Unsubsidized Stafford Loan
- Annual maximum loan amount of $47,167 per year, as determined by school.
- Fixed interest rate of 5.84 percent for academic year 2015-16.
- Interest accrues continuously from the date of disbursement and is payable quarterly.
- Approximately 1 percent origination fee is deducted before award is disbursed (fee subject to change).
William D. Ford Federal Direct GradPLUS Loan
- Students may borrow up to the cost of attendance, minus any other financial aid received.
- Borrowers must pass a basic credit check each time a PLUS loan application is processed.
- Repayment begins 60 days after the date the loan is fully disbursed.
- Deferment is available to students enrolled at an eligible school on at least a half-time basis.
- Fixed interest rate at 6.84 percent for academic year 2015-16.
- Interest accrues continuously from the date the loan is disbursed.
- Approximately 4 percent origination fee deducted before award is disbursed (fee subject to change).
- Two additional forms required to process.
Master Promissory Notes
Both Direct Loan options require students to complete and sign a Master Promissory Note (MPN) before any funds are disbursed.
Private Educational Loans
Depending on your circumstances, you may be interested in borrowing private student loans from banks and other lenders. These loans are not applied for through our office.
We encourage all students considering this option to consult with their financial aid officer, and then thoroughly research any potential lending institution.