Loan Programs Administered by the UofM Medical School Financial Aid Office
2010-11 Medical Student Loan Programs Summary (PDF)
Ford Federal Direct Subsidized Loan
The Subsidized Federal Direct Loan Program is a need-based federal student loan program available through the University of Minnesota. The maximum amounts that eligible medical students may borrow are $8,500 every 9 months; there is an aggregate limit of $65,500, which includes undergraduate federal subsidized loans. You must be a U.S. citizen, U.S. national, or U.S. permanent resident to be eligible. Direct Loan funds are disbursed in semester installments. There is a .50% fee. The annual interest rate depends on when you first borrowed a Ford Federal Direct Loan. For first-time borrowers on or after July 1, 1994, the interest rate is variable not to exceed 8.25%. Loans received after July 1, 2006 have a fixed 6.8% interest rate. Interest charges for new borrowers begin to accrue 6 months after graduation or termination from the University or if the student ceases to be enrolled as at least a half-time student. Forbearance is available for the length of residency. Repayment can be spread over 10-30 years. There is no prepayment penalty, and this loan is canceled upon death or total and permanent disability.
Primary Care Loan (PCL)
The Primary Care Loan is a need-based federal student loan program available through the University of Minnesota. The maximum amount that a student may borrow each academic year is the cost of attendance. Federal regulations require that parental income and asset information be included on the FAFSA to determine eligibility for this loan. To receive PCL, students must be registered full-time and be a U.S. citizen, U.S. national, or U.S. permanent resident. Students must agree to complete a primary health care residency program within 4 years of graduation and practice primary care through the date the loan is paid in full. The annual interest rate is 5 percent. Interest charges do not accrue during the in-school, grace, or residency/fellowship deferment periods, but begin one year after graduation or the end of deferments. The repayment period is 10 years. There is no prepayment penalty, and this loan is canceled upon death or total and permanent disability. Defaulting on the primary care component changes the interest rate to 18% and payment begins immediately.
Federal Perkins Loan
The Perkins Loan is a need-based federal student loan program available through the University of Minnesota. You must be a U.S. citizen, U.S. national, or U.S. permanent resident in order to apply. Full-time students may borrow up to an aggregate maximum of $30,000, including all undergraduate Perkins loans. The interest rate is 5 percent, and interest does not accrue during the in-school and grace periods. Repayment of this loan begins 9 months after a student graduates, enrolls less than half-time, or leaves school. There is a 10-year repayment period. There is no prepayment penalty, and this loan is canceled upon death or total and permanent disability.
Minnesota Medical Foundation (MMF) Loan
Long-term loans are issued at 6.5 percent. Repayment begins upon graduation with no grace or deferment periods. There is a 5-year repayment period. If you sign up for Electronic Funds Transfer (EFT) at the time of repayment, interest on this loan reduces to 6 percent.
Emergency loans are available to any medical student in need. Up to $600 may be borrowed interest-free for 90 days. These loans are available on 24 hours notice by contacting the Medical School Financial Aid Office which awards these loans on behalf of the Minnesota Medical Foundation.
University Trust Fund Loan (UTFL)
Medical students may borrow a maximum of $6,000 per academic year with a cumulative maximum of $14,000. The annual interest rate ranges from 3 percent to 7 percent. For loans with interest rates under 7%, annual interest must be paid one year after loan disbursement (even while in school), and interest is billed annually thereafter until repayment begins. 7% loans do not accrue in-school interest. Repayment of the loan begins 3 months after graduation or termination from the University and may be spread over 10 years. There is no penalty for prepayment, and this loan is canceled upon death or total and permanent disability.
Ford Federal Direct Unsubsidized Loan
The Unsubsidized Federal Direct Loan Program is a non-need-based federal program. This loan is available for students who do not qualify for a need-based Federal Direct Loan. The maximum amount medical students may borrow is $32,000 every 9 months. There is a .50% fee. Loans disbursed after July 1, 2006 have a fixed 6.8% interest rate. Interest begins to accrue on the date the loan funds are disbursed. Payment of interest and principal may be spread over 10-30 years. There is no penalty for prepayment, and this loan is canceled upon death or total and permanent disability.
Federal Direct Graduate PLUS Loan
The Federal Direct Graduate PLUS Loan Program is a non-need-based federal program. The loan is an unsubsidized loan available for Graduate/Professional students who are not fully funded to cost of attendance. There is a 2.5% fee. Interest is fixed at 7.9%. Interest begins to accrue on the date the loan funds are disbursed. The loan will be approved if you do not have an “adverse credit” history. If you are denied the loan due to “adverse credit,” you will have the opportunity to provide a creditworthy endorser and have the loan application reviewed again. Payment of interest and principal may be spread over 10-30 years. There is no penalty for prepayment, and this loan is canceled upon death or total and permanent disability.
