Dental school students may find they need to apply for student loans to fund the remainder of their educations. Both federal and private student loans are available for their needs.
To become eligible for federal loans, they need to fill out their Free Application for Federal Student Aid (FAFSA). They will also have to submit their taxes. If they are applying only for the Direct PLUS Loan or the Federal Direct loan, copies of their taxes won’t be necessary.
Federal graduate and dental school loans are further broken down into non-need-based and need-based. The need-based loan is known as the Health Professions Loan (HPL). Non-need-based federal loans include the Direct Loan, Private Educational/Alternative Loans, and the Direct PLUS loan.
Student Loans Center
Dental school loans are either private or federal loans made to students in advanced educational programs focused on entering a dental occupation. Federal loans are the primary resource relied upon by students. These include Federal Direct Loans, guaranteed by the U.S. government. Health Professions Student Loans (HPSL) fall within a limited federal loan program that is administered by individual dental schools. Loan awards are made depending on available funding to students who demonstrate great financial need.Read More
Private student loans are awarded by private banks and student loan companies, such as Sallie Mae. These loans are based on credit and are intended for educational use. Private lenders do use credit scoring systems and credit reports to determine the student’s eligibility for a loan. Credit reports and scoring also affect loan interest rates. This will be variable and may have no cap or maximum interest rate. While federal loans have a maximum amount students can borrow for their educations, private loans often do not cap the amount a student can borrow, as long as they have good credit. Students should consider carefully before choosing a private lender over a federal one.
At the graduate school level, you’ll notice some key differences in borrowing, as opposed to borrowing as an undergraduate student.
If you are married, born after January 1, 1996, or pursuing a master’s or doctorate degree, you’ll be categorized as independent. You’ll report a lower income because your family won’t affect your Expected Family Contribution (EFC). You’ll also be considered for the federal work-study program, direct unsubsidized loans, and PLUS loans. You also won’t be eligible for the Pell Grant unless you’re enrolled in a post-baccalaureate teacher certification program.
Your interest rates may be higher than an undergraduate student applying for a student loan. You won’t be eligible for subsidized loans, which means interest rates start to accrue on the first day. If you can, pay the interest only while you’re in school in order to speed up payment after you graduate.
It’s a good idea to know what your borrowing limits may be when you start working on a student loan.
Life can get in the way when you are making your loan payments. If you are unable to make your payments, you have two options:
Apply for deferment or forbearance for each of your student loans and return them to your loan services. If you are found to be eligible, you may need to provide additional documentation and continue making payments until your application is approved.
Knowing that student loans for graduate school come with higher interest rates, you should know about the different interest rate terms.
Every federal student loan has a fixed interest rate. Still, interest rates can be set higher than a variable rate is or will be in the future. Variable interest rates change during the life of your loan. Lenders use the London Interbank Offered Rate (LIBOR) to help set new rates.
As with most other loans, federal and private lenders both charge you a loan origination fee. If this term is new to you, this is a fee that is charged by the lender for processing new loan applications. It is charged up front and is compensation for setting the loan up for you. You’ll see them quoted as a percentage of the total loan.
Focusing on your student loans, different student loans come with different fee percentages. A Health Professions Loan has no origination fee.
General eligibility requirements for a student loan include that you need to be a U.S. citizen or an eligible non-citizen, you must be enrolled in a certificate or degree program eligible for student aid at your university, and you must have a demonstrated financial need for assistance.
Your eligibility for federal student aid may be limited if you have a conviction for a drug offense, have been incarcerated, or if you are subject to an involuntary civil commitment. Maintain your eligibility for federal aid by earning sufficient credits each semester. You also need to fill out a new FAFSA every year.
With a federal student loan, you have a range of repayment options of which you can take advantage. Your individual needs may be different from those of other graduates. Private loan repayment begins when loans are disbursed. You should start making payments as soon as school starts; you may be able to make interest-only payments, although you may be required to make full payments while you are in school.
Sallie Mae loans are private, so they have fewer repayment options for you. Interest rates at this level are also higher. These loans cover dental school expenses in dentistry, prosthodontics, endodontics, periodontics, oral and maxillofacial surgery, pediatric dentistry, and orthodontics. Sallie Mae’s Dental School Loan has more benefits than the Federal Direct Grad PLUS Loan.
Sallie Mae has created a plan with no origination fees, competitive interest rates, multiple payment options, and extended payment terms. It has also included a plan for no pre-payment penalties.
Sallie Mae’s repayment terms run 20 years with additional flexibility. In addition, students receive a 36-month grace period after graduation to begin making payments; during fellowships or residency, an additional 48 months of deferment are made available. Students who opt to begin making interest-only payments while in school are eligible for an interest rate that is 0.50% lower.