Federal Direct Loans
The U.S. Department of Education offers low-interest loans to eligible students to help cover the cost of graduate and professional school. There is no requirement to demonstrate financial need. The Free Application for Student Federal Aid (FAFSA) is required. Follow the guidance on the Applying For Financial Aid webpage to apply for federal student loans. The application checklist includes important details on how to complete your financial aid application.
Additional Steps to Receive My Loan
Students must have a valid Master Promissory Note (MPN) for each federal student loan type. The MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education. The MPN also explains the terms and conditions of your loan(s).
First-time loan borrowers, including first time Graduate PLUS loan borrowers, must complete Graduate or Professional Student entrance counseling. Entrance counseling ensures you understand your obligation to repay the loan.
These requirements can be completed at StudentAid.gov.
Loan Rates and Limits
All Federal Direct Loans available to graduate/professional students are unsubsidized, which means that interest will begin to accrue when funds disburse.
The interest rates are fixed rates for the life of the loan. The lender will deduct a loan fee from the accepted amount prior to disbursement.
The interest rate and loan fee for Direct Loans first disbursed on or after July 1, 2022 and before July 1, 2023 are shown in the chart below.
|Graduate or Professional Borrowers||Interest Rate||Loan Fee|
|Direct Unsubsidized Loan||6.54%||1.057%|
|Direct Graduate PLUS Loan||7.54%||4.228%|
There are limits on the amount of Federal Direct Unsubsidized Loan you may be eligible to receive each academic year (annual loan limits) and the total amounts that you may borrow for undergraduate and graduate study (aggregate loan limits). The annual loan limit is based on the number of months enrolled for the academic year. The aggregate loan limit is based on all Federal Direct Subsidized and Unsubsidized Loans borrowed for undergraduate and graduate study. The chart below reflects the annual and total aggregates per college:
|College of Medicine||$40,500||$42,722||$44,944||$47,167||$224,000|
|College of Pharmacy and Masters of Public Health||$33,000||$34,389||$35,778||$37,167||$224,000|
|College of Graduate Studies||$20,500||$20,500||$20,500||$20,500||$138,500|
Students should exhaust their eligibility for the Direct Unsubsidized Loan prior to borrowing from the Graduate PLUS Loan.
Direct Graduate PLUS Loan
At NEOMED, the application process for a Direct Graduate PLUS Loan begins when a student accepts a loan offer on Student Self-Service. Upon acceptance, the Office of Financial Aid will originate the loan with the lender (U.S. Department of Education), which initiates the application process. The lender will conduct a credit check.
To qualify for a Direct Graduate PLUS Loan, you must not have an adverse credit history. If you have placed a security freeze on your credit file, you must lift or remove the freeze at each credit bureau in order for your application to process. Further details found on the Federal Student Aid’s website.
When Do I Have to Pay Back My Loan?
Repayment begins six months after enrollment status drops below half-time (graduate, leave school, or drop below half-time enrollment). Federal Direct Loans offer multiple repayment plans. Further details found on the Federal Student Aid website.
Exit Counseling is required when enrollment status drops below half-time (graduate, leave school, or drop below half-time enrollment). The purpose of exit counseling is to ensure you understand your student loan obligations and are prepared for repayment. Exit counseling can be completed on the Federal Student Aid website.
Private Educational Loans
Private educational loans are offered by private lending institutions. It is recommended that students complete the Free Application for Federal Student Aid (FAFSA) to determine their eligibility for Federal Student Loans prior to accepting a private educational loan.
Before selecting a private educational loan, students should:
- Review terms and conditions of the loan (repayment options, cosigner release options, deferment options, interest capitalization schedule, terms of interest).
- Review eligibility requirements (enrollment status, citizenship, degree program).
- Review their credit score, as the lender will base your eligibility against your credit score.
- Know that a private educational loan requires school certification. A private education loan’s eligibility will be determined by taking the student’s cost of attendance and subtracting all other accepted scholarships and loans. Certifications will be denied if the student has accepted a financial aid package up to their cost of attendance.
Students who feel that a private educational loan meets their objectives better than the federal student loan program will need to complete a promissory note with the lender of their choice. A school certification form will be sent to NEOMED’s Office of Financial Aid to verify your eligibility and enrollment.
Students may be eligible for need-based loans. Students must apply for need-based aid on an annual basis. Follow the guidance on the Applying for Financial Aid webpage to apply for need-based aid. Donations to the NEOMED Foundation and funding from the Health Resources and Services Administration provide need-based loans to medicine students. NEOMED is the lender for these loan types. Upon entering repayment, Heartland ECSI will be the loan servicer.
Need-based loans that are available to third and fourth year medical students. These loans are subsidized while the student is enrolled at least half-time at NEOMED. Repayment begins 3 months after the student is no longer enrolled at least half-time. The repayment length is 10 years (120 payments). The loan will begin to accrue interest once repayment begins. The interest rate on the NEOMED Loans is 5%. There is one loan opportunity with no interest that will be offered to those students that demonstrate the greatest financial need.
LOANS FOR DISADVANTAGED STUDENTS
Need-based loan that is available to medical and pharmacy students that come from a disadvantaged background. Disadvantaged background includes students whose parents adjusted gross income is at or below 200% of the poverty guideline, students who are from a Medically Underserved Area, and students who are a first-generation college student. Parent information is required on the student’s FAFSA and need-based aid application in order to be considered.
The loan is subsidized while the student is enrolled at least half-time at NEOMED. Repayment begins 12 months after the student is no longer enrolled at least half-time. Borrowers can request a deferment during residency. The deferment option for residency training, which must be completed annually, is available for the duration of the training. The repayment length is 10 years (120 payments). The loan will begin to accrue interest once repayment begins. The interest rate on the Loan for Disadvantaged Students is 5%.
PRIMARY CARE LOAN
Need-based loan that is available to medical students that agree to practice primary health care. Students must enter and complete a primary care residency training program. The service obligation of the loan is fulfilled either when the loan is repaid in full or ten years from the beginning of repayment. Parent information is required on the student’s FAFSA and need-based aid application in order to be considered.
The loan is subsidized while the student is enrolled at least half-time at NEOMED. Repayment begins 12 months after the student is no longer enrolled at least half-time. Borrowers can request a deferment during primary care residency. The deferment option for primary care residency training, which must be completely annually, is available for the duration of the training. The repayment length is 10 years (120 payments). The loan will begin to accrue interest once repayment begins. The interest rate on the Primary Care Loan is 5%.
Penalties for non-compliance by borrower – The loan will no longer be subsidized. Interest will begin to accrue at a 7% interest rate, beginning on the date of noncompliance and ending when the loan is paid in full. The borrower is not eligible for the deferment provisions.
Health Professions Student Loan
The Health Professions Student Loan program provides federal funding from the U.S. Department of Health and Human Services to eligible schools to provide long-term, low-interest loans to eligible individuals. Funds are awarded to eligible schools and the schools are responsible for selecting recipients, making reasonable determinations of need, and providing loans based on eligibility criteria. Funding allocations vary yearly for students in the College of Pharmacy. The 5 percent interest rate is subsidized during enrollment with a one-year grace period. The maximum repayment period is 10 years. A promissory note is required, and students must accept their offer through Student Self-Service. This loan is eligible for consolidation with other federal student loans for qualification for income-driven repayment plans and any eligible federal loan forgiveness opportunities.