Loans & Work-Study Options for MD Students
Students seeking additional funds to cover medical school costs have several options in addition to scholarships. If you qualify for need-based aid using the Free Application for Federal Student Aid® (FAFSA®) or College Scholarship Service (CSS) Profile, you are eligible for an NYU Grossman School of Medicine institutional Homan Loan. U.S. citizens and permanent residents can apply for on-campus employment through the federal work-study program. Low-interest federal Direct Loans are available to all U.S. citizens and permanent residents regardless of financial need.
The Homan Loan allows students to borrow a loan without any interest accruing during medical school. Interest starts accruing at 4% three years after graduation, although students are not required to begin repayment until the fourth year.
Federal loans are long-term, guaranteed loans directly from the U.S. Department of Education. These are used to cover educational expenses, regardless of financial need.
Direct Unsubsidized Loan Program
Students enrolled at least half-time can borrow up to $40,500 annually with Direct Unsubsidized Loans but cannot borrow more than $224,000 in total. The interest rate for the 2021–22 academic year is 5.28 percent with a standard 10-year repayment term. The Department of Education charges a 1.057 percent origination fee at the time of disbursement.
Direct Graduate PLUS Loan Program
Students enrolled at least half-time can borrow up to the cost of attendance, excluding any other financial aid received, with Direct PLUS Loans. The interest rate for the 2021–22 academic year is 6.28 percent with a standard 10-year repayment term. The Department of Education charges a 4.228 percent origination fee at disbursement.
Direct Graduate PLUS Loans are “credit ready,” which means you undergo a credit analysis to be approved for this loan. However, credit checks are less stringent than those you undergo for private loans.
Federal Loan Repayment and Deferral
You begin repaying Direct Unsubsidized Loans and Direct PLUS Loans six months after your enrollment as a full-time student ends. Interest on federal loans accrues while you’re in school and during grace and deferment periods, although you may postpone interest payments until the end of a grace period.
If you have any unpaid interest remaining at the end of the grace period, it is added into the principal balance. Your repayment plan is based on this new principal balance.
There is no way to defer federal loans during your residency training. However, you may opt in to an income-adjusted payment plan to lower your initial loan payments or request forbearance. With a forbearance, you do not make any payments for the requested time period, but interest accrues and is added to the loan’s principal balance.
For questions about the financial aid process or to schedule a counseling session, contact the Office of Financial Aid at email@example.com or 212-263-5286.