Federal Perkins Loan: The federal Perkins Loan is currently a 5% fixed-interest rate loan, subsidized during enrollment. Annual loan amounts may be limited because of demand and limited funds. Repayment starts nine months after graduation or withdrawal from school and may be extended over 10 years. Additional deferments are possible for temporary total disability or volunteer service in a private, non-profit organization, VISTA or the Peace Corps. Some teachers of students from low-income families and full-time teachers of handicapped children may also qualify for partial loan cancellation.

Primary Care Loan (PCL): The Primary Care Loan is a low-cost subsidized federal loan available to medical students committed to primary health care practice. The interest rate is 5% and begins to accrue following a 12-month grace period after you cease to be a full-time student. This loan is also eligible for deferment during medical residency. You must continue to practice in a primary health care field until the loan is repaid in full. If you fail to fulfill your service obligation, the outstanding loan balance will be computed at an interest rate of 18% from the date of noncompliance, compounded annually.

Loan for Disadvantaged Students (LDS): Usually awarded mid-fall quarter, this is a 5% fixed-interest rate subsidized federal loan made available through the U.S. Department of Health and Human Services (DHHS).  This loan includes a nine-month grace period before repayment, and is eligible for deferment throughout medical residency. Awards are made to medical students with the lowest combined parent and student contributions (PC and SC) based on the federal needs analysis calculation. Students must come from an economically-disadvantaged background (low income level tables are published annually by DHHS), and/or are considered by faculty to come from a disadvantaged background (criteria determined at the time of admissions review).

William D. Ford Direct Loans: Federal Direct Loans, both subsidized and unsubsidized, are administered by the U.S. Education Department (ED). Using the income and asset information provided on the FAFSA, the financial aid office determines your eligibility and notifies you of the types and amounts of Direct Loans for which you qualify. The interest rate on these loans is adjusted each July 1 while the student is in school and during the grace period and when the loans are in repayment. The Direct Loan Borrowing Limits and an Interest Rate Table are available for review.

     Direct subsidized loans are awarded to students with financial need. The federal government pays the interest on subsidized loans while the student is enrolled at least half time, during the six-month grace period (after graduation or withdrawal from school), or during authorized periods of deferment. For health professions students, the annual maximum borrowing limit for Direct subsidized loans is $8,500. The aggregate borrowing limit is $65,500.

     Direct unsubsidized loans are not based on financial need or income. The interest rate and terms are the same as for Direct subsidized loans; however the student is charged the interest on the loan beginning the day the loan is disbursed. Students can choose to pay the interest while they are in school or capitalize the interest (add the unpaid accumulated interest to the principal balance) until repayment begins. For health professions students, the aggregate borrowing limit for Direct subsidized and unsubsidized loans combined is $224,000.

     Direct Grad Plus loans are available for graduate and professional students who need to borrow funds beyond the federal subsidized, unsubsidized and Perkins Loan limits.  The Direct Grad Plus loan offered at UC Davis has a fixed interest rate of 7.9%, no annual or aggregate borrowing limits (other than cost of attendance less other financial aid received).  While credit checks are required to be eligible for the Grad Plus, the credit criteria are less strict than those associated with private student loans.  Furthermore, if you do not meet the credit requirements for a Grad Plus, you may still obtain the loan with an endorser who does meet the credit requirements.

     Here is a loan comparison chart to help you consider the significant variables when choosing between the Grad Plus loan and a private or alternative loan.  A private or alternative loan may be less expensive depending on your credit score and whether the variable interest rate will increase before you complete repaying the loan.

     Contact the School of Medicine financial aid office to obtain a Direct Grad Plus loan request and credit authorization form.

Private and Alternative Loans: Student fee increases and budget cuts can make it increasingly difficult to finance the total cost of attendance at UC Davis. Please consider the following before applying for a private or alternative loan:

• FNP/PA and post-baccalaureate students who do not qualify for loans through federal loan programs should speak with a financial aid officer to obtain approval before applying.
• All other students should review the loan programs available for their individual program of study and contact their respective financial aid office with questions before applying.
• Students who need to borrow funds beyond the federal subsidized, unsubsidized and Perkins Loan limits may choose between the Direct Grad Plus Loan and a private or alternative loan (see loan descriptions above).

To assist you in making the best lender choice, we encourage you to visit SimpleTuition. SimpleTuition is an independent technology company that provides a Web-based student loan comparison platform. You will be able to compare lenders for overall cost, interest rate, front and back-end repayment incentives and more. When using SimpleTuition be sure to select the option to see "all loans" rather than just "featured loans." You may also view a list of private loan lenders here; however this site does not compare as many factors as SimpleTuition. You are not required to use this online option. The selection of a student loan provider is entirely your choice. Use our school code 001313-72 when applying for these loans.

Residency and Relocation Loans: The federal Education Department (ED) has ruled that expenses related to medical residency applications and interviews are not "educational expenses" and therefore cannot be recognized or funded with financial aid. ED defended this ruling by saying that applying and interviewing for residency positions are not required to obtain the Doctor of Medicine degree. This ruling prevents the School of Medicine financial aid office from awarding any federal or university funds specifically for residency application or interview costs.

To fill the funding void created by ED’s ruling, many private lenders have developed loan programs specifically for final-year medical students who incur residency application and interview expenses. These privately-guaranteed loans do not require certification by the financial aid office. However the loans are more expensive than university or federally-guaranteed loans and are only available to students who are deemed credit-worthy.

Considerations:

• Borrow wisely and do not borrow more than you need. Calculate your expense estimates carefully. Seek advice from past graduates and current residents who have been through the process. Do not overspend. Some students believe they deserve a higher standard of living than when they were students, and they may buy a new vehicle or travel, for example. Remember that as a resident, your take-home pay will not be much more than what you were living on while in medical school.
• Interview expenses: If your goal is a residency position in a particular geographic location, you may save on travel expenses by planning some of your fourth-year electives in that area during the fall and winter quarters. If you are able to coordinate your electives with this in mind, and can document expenses that exceed the "transportation" portion of your student expense budget, you may qualify for additional financial aid. Talk with a financial aid staff person to learn more.
• Relocation expenses: Ask yourself these questions when planning your relocation: When will I receive my first paycheck? What will my living expenses be for the period following graduation until my first paycheck? Will I need to make a security deposit on an apartment or to establish utilities? What supplies will I need to purchase in order to make the move? Other expenses to consider may include insurance premiums, automobile registration in a new state, health care premiums or expenses, and household supplies. 

See our residency and relocation loan comparison chart for details.