To finance expenses associated with a medical school education, most students need to borrow loans. Federal and private student loans are available to help pay for medical school and help cover living expenses. It is important to know what types of loans are available and understand the terms and conditions associated with each loan.
Types of Loans
Direct Unsubsidized Loan
Awarded to students regardless of financial need. Borrowers are responsible for any interest that may accrue during the course of study or during grace and deferment periods. Interest begins accruing the day the funds are disbursed and will continue to accrue until the day the loan is repaid. In addition, there is a loan fee on all Direct Unsubsidized loans (see chart below). The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement.
Interest rates on these loans are subject to change each year; however, once a loan is borrowed at a certain rate it will remain fixed at that rate for the life of the loan (see chart below).
Direct Graduate PLUS Loan
Available to graduate or professional students to help pay for education expenses not covered by other financial aid. A separate loan application is required and must be completed annually at studentaid.gov. Eligibility is not based on financial need, but a credit check is required. It is considered a “hard hit” meaning a potential borrower expressed interest in opening a new source of credit and is reflected as an actual credit inquiry on the borrower's credit reports. This may impact your credit score and remain on your credit reports for two years. The same result occurs to any endorser, if there is one. Borrowers who have an adverse credit history must meet additional requirements to qualify.
In comparison to the Direct Unsubsidized loan, interest rates and origination fees are higher, but interest accrual is similar. Interest rates are subject to change each July 1st, however, once a loan is borrowed at a certain rate it will remain fixed at that rate for the life of the loan (see chart below). Interest begins accruing the day the funds are disbursed and will continue to accrue until the day the loan is repaid. Borrowers are responsible for any interest accrual during the course of study, during grace and deferment periods.
In addition, there is a loan origination fee charged by the U.S. Department of Education for the processing of your loan. The origination fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement (see chart below).
For more information, please visit studentaid.gov.
North Shore-LIJ Health Loan
The North Shore-LIJ Health loan is an institutional loan program that is awarded based on financial need and availability of funding. To qualify, students must apply for institutional aid. Being that this is a private, institutional loan program, funds borrowed will not be eligible for Federal loan consolidation, repayment, or forgiveness programs. Please view the Application and Solicitation Disclosure for more information about this loan.
Current students - log in to your Heartland ECSI account by visiting https://borrower.ecsi.net/. If you have access to your log in credentials and need to complete your promissory note, you may do so by visiting https://www.ecsi.net/prom8s/.
Alternative Loans
Alternative loans are offered through various private lenders. These loans are issued by banks or credit unions and in most cases, should be your last resort. Terms and conditions differ from loans that are backed by the Federal government. Some differences include but are not limited to:
- Interests rates are generally higher and variable
- Interest and/or payments are not always deferred while you are enrolled in school
- Deferment and forbearance options may differ or be nonexistent (something to consider when beginning residency)
- There may be origination or other fees associated with borrowing
- Repayment terms are often less favorable than federal loans
- Loans are not eligible for federal loan consolidation or federal income-driven repayment plans
For additional information about federal vs. private student loans, visit studentaid.gov
Federal and Institutional Student Loan Interest Rates | |||||
| Loan Type | First Disbursed on or after July 1, 2023, and before July 1, 2024* | First Disbursed on or after July 1, 2022, and before July 1, 2023* | |||
| Direct Unsubsidized Loan | Fixed at 7.05% | Fixed at 6.54% | |||
| Direct Graduate PLUS Loan | Fixed at 8.05% | Fixed at 7.54% | |||
| North Shore-LIJ Health Loan | Fixed at 5.0% | Fixed at 5.0% | |||
*Interest rates on federal student loans are set by federal law, not the U.S. Department of Education, on July 1 each year
Federal and Institutional Loan Information | |||||
| Loan Type | Annual Limit | Aggregate Limit | Origination Fee First disbursed on or after 10/1/20 and before 10/1/24** | Repayment Terms | Repayment Period |
| Direct Unsubsidized Loan | MS1: $42,722 MS2: $40,500 MS3: $47,167 MS4: $44,944 | *see below | 1.057% | 6-month grace period after graduation or after leaving school | Payments are made monthly. Eligible for federal consolidation, income-driven repayment plans, and Public Service Loan Forgiveness programs. |
| Direct Graduate PLUS Loan | Up to cost of attendance minus any other financial aid received for the period of enrollment. | no aggregate limit | 4.228% | Graduate PLUS loans do not have a grace period. You'll receive an automatic deferment while you're enrolled in school, and for an additional 6-months after you graduate or leave school. No payments are required during this 6-month deferment period. Interest will accrue during periods of deferment. | Payments are made monthly. Eligible for federal consolidation, income-driven repayment plans, and Public Service Loan Forgiveness programs. |
| North Shore-LIJ Health Loan | Annual limits vary by year and availability of funds. | $40,000 during the 4-year program period | $0 | 48-month grace period beginning July 1 following graduation from the MD program. Withdrawal or dismissal from the MD program or graduation from an alternate degree program will have a grace period extending 9-months of graduation/separation. Refer to the Application and Solicitation Disclosure Statement for additional information. | Payments are made monthly. Not eligible for federal consolidation, income-driven repayment plans, and Public Service Loan Forgiveness |
*The maximum aggregate loan limit for Direct Loans (subsidized and unsubsidized) is $224,000, of which no more than $65,500 can be subsidized. These are lifetime limits meaning the total amount borrowed during undergraduate and graduate years. Aggregate loan limits do not include accrued interest.
**The loan origination fee is proportionately deducted from each loan disbursement you receive. Please keep this in mind when determining the amount you need to borrow. The percentage is determined by the date of the first disbursement of the loan. Any subsequent disbursements of that loan, even if made on or after the relevant October 1, will have the same loan fee percentage that applied to the first disbursement of that loan. The loan origination fee is determined by the U.S. Department of Education and is subject to change.
Please note that Hofstra University is required to submit loan information to the National Student Loan Data System (NSLDS), and that information is accessible by guaranty agencies, lenders, and institutions determined to be authorized users of the data system.