Financial Health

Financial Health can be defined as the dynamic relationship of one's financial and economic resources as they are applied to or impact the state of physical, mental and social well-being.   Financial Health and Debt Management are two dimensions that you must consider when you begin residency.  Your focus as a medical student was matriculating and succeeding in medical school and leave the issue of how to pay for it at a later date. The financial decisions you made at that time, however, impact the amount of debt you are now dealing with and the number of years of your professional career it will take to pay off your student loans.  The less debt you graduated with, the more options you will have when you start your career.  The American Association of Medical Colleges (AAMC) has created several useful financial tools. The FIRST program -- Financial Information, Resources, Services, and Tools -- was created to help guide you financially through your medical school and residency years. Please take some time to utilize the MedLoan Organizer and Calculator and the Education Debt Manager.  Below you will find several beneficial links to guide you through your debt repayment.

Federal Loan Entrance Counseling 
Regulations governing the disbursement of federally guaranteed loans require that every new borrower receive loan counseling before their loans are disbursed. The purpose of this is to familiarize you with the process of financing your medical school education, including your rights as a borrower, your obligations, benefits (e.g., deferment options), and personal budgeting issues. The COM Office of Financial Services offers federal online loan entrance counseling to satisfy the federal government's requirement and will contact each new borrower with instructions.  

AAMC FIRST

The American Association of Medical Colleges (AAMC) has created several useful financial tools. The FIRST program -- Financial Information, Resources, Services, and Tools -- was created to help guide you financially through your medical school and residency years.
The AAMC has FIRST Financial Aid Fact Sheetsand FIRST Videos and Webinars available on their extensive site. 

Other helpful financial tools are:
MedLoan Organizer and Calculator provides a secure location to organize and track student loans while also displaying possible repayment plans and costs based on a student's individual loan debt.   

Credit Reports
The Federal Direct Graduate PLUS Loan and private loans require a credit check. It is important to maintain credit worthiness in order to qualify for borrowing needed for your medical education as well as in future years. Having good credit is also vital to many of life’s most important purchases, including financing a home or car, and some employers will not offer jobs to candidates with poor credit. It is recommended that you request a copy of your credit report from a credit bureau to make sure there are no problems. You may request a free credit report at www.annualcreditreport.com. It’s smart to check all three reports at least annually, because they may have slightly different data. Changes you don’t expect or did not authorize can tip you off to a mistake or to identity theft.

Debt Management

NSLDS: The National Student Loan Data System (NSLDS) is the U.S. Department of Education’s online database for federal student loan borrowers. NSLDS receives data from schools, loan guaranty agencies, the Direct Loan program, and other Department of ED programs. This web-based resource provides you with access to the details (loan type, loan servicer, disbursement dates, loan balances and repayment dates) of your federal loans.

PRIVATE OR INSTITUTIONAL LOANS
NSLDS is for federal loans only. To find out the details of other education loans, you will want to review your credit report, reach out to the lender of the loan, or the school where you borrowed the funding.

GRACE PERIOD, LOAN DEFERMENT, AND FORBEARANCE
A 6-month grace period is applied automatically to Direct Loans at graduation. During this time, no payments are required, although you may make voluntary payments at any time. During grace, subsidized loans remain interest-free because the government continues to pay the interest, and unsubsidized and Graduate PLUS loans continue to accrue interest because the borrower is responsible for the accruing interest.

After a grace period has been exhausted, a deferment may be another option to delay making payments on your student loans. Deferments are usually granted in 12-month increments. The most common deferments are enrollment at least half-time at an eligible college, enrollment in an approved graduate fellowship program, or service in the military. If you had previous loans as an undergraduate or graduate student, ETSU, Quillen College of Medicine will report your enrollment here to the National Student Clearinghouse and typically no forms are required.

You may request a forbearance on your loan if you are temporarily unable to make your scheduled monthly loan payments due to financial difficulties, medical expenses, change in employment or other reasons acceptable to your loan servicer. You also may be eligible for mandatory forbearance if you are serving in a medical or dental internship or residency program, the total amount you owe each month for all loans is 20% or more of your total monthly gross income, you are serving in an AmeriCorps position, or you are a member of the National Guard.  Contact your loan servicer for more information or paperwork to complete.

LOAN REPAYMENT PLANS
Traditional repayment and income-driven repayment plans are offered to graduates. Standard, extended and graduated repayment plans are all traditional plans that will have a higher monthly payment in comparison to the income-driven repayment plans. With traditional repayment plans, the borrower’s monthly payment is based on the term of the loan and the amount of debt. Within the traditional plans, the most aggressive plan is likely the standard plan. This option requires the borrower to repay the full loan in 10 years and the monthly payment is based on the total amount of debt.

If you want to minimize your monthly payments, you may want to select one of the income-driven repayment plans. These plans include income-contingent repayment, income-based repayment, pay as your earn (PAYE) and revised pay as you earn (REPAYE). These plans may offer more affordable monthly payments because they limit the monthly payment to 10-20% of your discretionary income. The lower the monthly payment, the longer it may take to repay the debt. More time in repayment allows for more interest to accrue, which can result in higher total cost. Borrowers can always choose to make larger payments, without a penalty, and can ultimately determine the length of time to pay off their loans.

To see monthly payments, interest costs, and potential forgiveness amounts based on actual loan debt, MD students should access the MedLoans Organizer and Calculator. Other School of Medicine students should access the Repayment Estimator.

LOAN CONSOLIDATION
Federal Consolidation Loans allow borrowers to combine all federal student loans into a single loan and extend repayment for up to 25 years. Federal Consolidation Loans have one fixed-interest rate based on a weighted average of the current rates on your existing loans. Applications are made through studentaid.gov. There are pros and cons to consolidation; review the differences carefully.

PUBLIC SERVICE LOAN FORGIVENESS
If you are employed by a government or not-for-profit organization, you may be able to receive loan forgiveness under the Public Service Loan Forgiveness Program (PSLF). PSLF forgives the remaining balance on your Federal Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.

East Tennessee State University qualifies as a governmental agency.  You may wish to submit your Public Service Loan Forgiveness (PSLF) and Temporary Expanded PSLF (TEPSLF) Certifications and Application annually.  You will need to complete and sign page 1 of this form and submit to the Office of Graduate Medical Education to provide additional information and complete page 2.  The GME office will be happy to fax in on your behalf and is here to assist you with this process.

If assistance is needed with your loan forgiveness application please contact:
Renee McNeely, GME Assistant Dean at mcneely@etsu.edu