Direct Unsubsidized Loans:
The Direct Unsubsidized Loan Program is a federal program that allows a first-year medical student, based on a 10-month budget, to borrow up to $42,722 for the academic year. Interest accrues (accumulates) on an unsubsidized loan from the date of the first disbursement. You can pay the interest while you are in school and during grace periods and deferment or forbearance periods, or you can allow it to accrue and be capitalized (that is, added to the principle amount or your loan). If you choose not to pay the interest as it accrues, this will increase the total amount you have to repay because you will be charged interest on a higher principal amount. The interest rate is 6.8% and begins on the date of disbursement. There is also a 1% Origination Fee that is deducted by Direct Lending at the time of each disbursement.
Repayment for Unsubsidized Stafford Loan does not begin until six months after you graduate or cease to be enrolled at least half-time in a degree-seeking status for a period of six months. You can, however, elect to begin repayment sooner if desired.
NOTE: The total outstanding debt a medical student can have from all Stafford Loans (Subsidized and Unsubsidized combined) is $224,000. Outstanding Stafford Loans received from both the FFEL and Direct Loan Programs for undergraduate or graduate education are included in these aggregate totals.
Direct Graduate/Professional PLUS
The Direct Grad Plus Loan Program is another federal loan program. The maximum amount a student may borrow is the cost of attendance for the academic year minus any other financial aid received for that same period. Other financial aid includes, but is not limited to: federal and private student loans, both outside and institutional scholarships, Military HPSPS and assistance directly from hospitals. A credit check is required for Grad Plus Loans. If you have adverse credit, you will be denied by Direct Lending. If you are denied, you may reapply with a credit-worthy cosigner. The interest rate is 7.9% and begins on the date of disbursement. There is also a 4% Origination Fee that is deducted by Direct Lending at the time of each disbursement.
Repayment for Grad Plus Loans begins within 60 days after the final loan disbursement. However, you may apply for an in-school deferment by contacting the Direct Loan Servicing Center while you are still attending at least half-time in a degree program.
For more information on both the Unsubsidized and Grad Plus Loan Programs you may go to:
Pat Peace, Director of Financial Services
LMU-DCOM Financial Services Office
6965 Cumberland Gap Parkway
Harrogate, TN 37752
Office: 423.869.7107; 800.325.0900, ext. 7107