For American students going to a Caribbean medical school, one of the most daunting obstacles to becoming a doctor is to figure out how to pay for it. There are many questions. Do the parents have to pay for it? Will it cover expenses beyond tuition such as living expenses? Will the parents need to cosign the student loan? Who is lending the money?
Direct Loans for Caribbean Medical School Students
For most US students, the primary source of funds for Caribbean institutions approved the US Department of Education is through student loans funded by the US government. The first step is to complete the FAFSA (Free Application for Financial Student Aid). It doesn't matter if the family makes a six figure income or something that is far less. The composition of the financial aid package will be similar for most students. The only difference will be the amount of subsidized loans.
After completing the FAFSA and the Department of Education sending the FAFSA data to the Caribbean medical school, a financial aid package will be created. It usually consists of:
- $20,500 in Direct Loans (Stafford loans) for graduate students (up to $8,500 subsidized)
- The remaining portion will be provided by Direct PLUS loans (Graduate Plus before July 1, 2010)
The student loan interest rates are:
- Direct subsidized loans for graduate students - 6.7%
- Direct PLUS loans (formerly the Graduate PLUS Loan) - 7.9%
- All loans have a 4% origination fee that's deducted before disbursement.
Direct PLUS Student Loans
Because Caribbean medical school tuition exceeds the $20,500 limit for Stafford loans, Direct PLUS Loans are needed to bridge the gap. These loans accrue interest immediately, but payments will be deferred as long as the student is enrolled at least half-time. Unlike Stafford loans, there are no limits to the amount borrowed up to the cost of education with Direct PLUS loans.
President Obama signed healthcare reform legislation on March 30, 2010 which had an amendment that eliminates the Federal Family Education Loan Program (FFELP) on July 1, 2010. Because of this, all students loan programs funded by private banks including the Graduate PLUS Loan, are being replaced with the government's Direct Loan Program.
A credit check will be done for Direct PLUS loans. Adverse credit history will result in a denial unless the promissory note is co-signed by someone creditworthy such as a parent.
If Direct PLUS loans are not available for credit reasons, some Caribbean medical schools have access to lending companies that will loan students the remaining money needed. Some US banks will consider private loans for medical school students as well. Other possible funding options include home equity loan, home equity line of credit or a personal loan.
Without any financial resources going in, it is possible to be a half million dollars in debt, even if the student fails to complete his education or fails to get a license to practice medicine in the United States. Remember that student loan debt is rarely discharged in bankruptcy even if the medical school student fails to become a doctor. Because of this, consider the best Caribbean medical schools which are SGU, Ross, Saba, and AUC because graduates from these institutions are eligible to be licensed to practice medicine in all 50 states. AUA, SMU, and MUA grads are not eligible in California. This is bad because 10 other states follow the California list with regards to licensing to practice medicine.
Finally, try to work and make money as much as possible before entering Caribbean medical school. Stopping medical school education temporarily in order to make money by working is a lot harder than it seems.
Reference:
Yarbrough, Marcus. The Student Doctor Network Caribbean Medical School Primer: Everything you need to know before you go. Coralville, IA: MedRounds Publications, Inc., 2007.
