Lessening the Burden: TMA Loan Programs Keep Student Debt Low

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Medical Education Feature - February 2006

 

ByKen Ortolon
Senior Editor

Remember what you received when you graduated from medical school? A degree and a loan payment form. You weren't alone. Over the past 20 years, medical school tuition and the average debt graduating medical students face have risen rapidly. The Association of American Medical Colleges says both grew faster than the increase in the consumer price index. In 2004, the average educational debt for medical graduates surpassed $115,000.

With that type of debt staring most new physicians in the face, it is important for them to secure as much financial assistance as possible to lessen the burden. And the Texas Medical Association for decades has helped Texas medical students do just that with scholarships and loans that aid nearly 300 students attending Texas medical schools each year.

While the amount of financial aid any one student receives from TMA is minimal in relation to the overall debt students can expect to accrue, TMA leaders and medical school officials say TMA's financial aid programs are highly sought after and can make a difference in cutting those postgraduation bills.

"What we know is that students - particularly needy students - have huge, huge bills when they get out of medical school," said Josie R. Williams, MD, a member of the TMA Board of Trustees and immediate past chair of the TMA Educational Scholarship and Loan Committee. "If we can soften that blow just a little bit, then it makes a big difference for the future doctors of this state."

 

Lowering the Interest

TMA has been offering financial aid to Texas medical students for more than half a century (see " TMA Offers Wide Array of Loan, Scholarship Programs "). It began in 1952 when former TMA President Sam E. Thompson, MD, and his wife, Annie Lee, established the Dr. S.E. Thompson Scholarship Loan Fund. The association's financial aid efforts were expanded in 1966 when another former TMA president, May Owen, MD, established the May Owen Irrevocable Trust to provide financial aid to Texas medical students.

Today, these programs, along with three more recent loan programs, provide about $800,000 per year to roughly 275 medical students. Recipients of TMA loans can borrow between $3,000 and $4,000 annually, with a lifetime maximum of $8,000.

Interest on the loans is fixed at 4.4 percent, and principal repayment begins four years after graduation.

Gail Schatte, director of educational loan funds in TMA's Loan Funds Administration Department, says the Educational Scholarship and Loan Committee works closely with the financial aid offices at all eight Texas medical schools to determine who gets TMA loans.

June Perry, associate director for student financial aid at The University of Texas Southwestern Medical Center at Dallas, says her institution usually gets about $86,000 annually from the Thompson fund, which is reserved for students at the four UT System medical schools. With a maximum loan amount of $3,000, that means roughly 28 loans per year are provided to UT Southwestern students.

Ms. Perry says the loans normally are earmarked for first-year students to help them keep their interest-accruing debt low during the early part of their training. She says the low 4.4-percent rate is attractive to students who typically must borrow at rates nearer to 6 and 7 percent.

"They're looking at everything nowadays because they know that a majority of their [financial aid] package is going to be loans," Ms. Perry said.

Resident physicians also are eligible for loans under the TMA programs. The loans are available to residents in any year of postgraduate training. A resident may borrow up to $3,000; repayment must begin two years after the loan is received.

The Patricia Lee Palmer, MD, Memorial Resident Loan Fund also provides loans specifically for single, female resident physicians. The fund honors the daughter of former TMA House of Delegates Speaker Bernard Palmer, MD. Dr. Patricia Palmer died in an automobile accident in December 1999.

 

Fighting Hopwood

In addition to TMA's loan programs, the association provides several medical student scholarships each year. The most notable of these may be the TMA Minority Scholarship, which was created in 1998 to help counter the impact on minority medical school enrollment of the so-called Hopwood decision. That court ruling barred public universities in Texas from using race as a factor in admissions decisions.

The Minority Scholarship Program awards $5,000 to Hispanic, African-American, and Native American students attending any Texas medical schools. The scholarships are rotated among the various schools every year so students at all of the schools benefit.

The first minority scholarships were awarded in 1999, with three students receiving scholarships. Between 2000 and 2003, only one student received the scholarship each year.

In 2004, however, fundraising for the scholarship was turned over to the TMA Foundation. That year, the foundation raised enough money for four scholarships. Six were presented in 2005. Five scholarships are expected to be awarded this year.

In addition to the minority scholarship, TMA administers four other scholarship funds that provide several scholarships ranging from $400 to $1,000 annually.

While the scholarship amounts again are small compared with students' overall educational costs, they do have an impact. Dr. Williams says there are students who have gotten the minority scholarship who otherwise might not have been able to attend medical school.

And Ms. Perry says being able to offer the minority scholarship as part of its financial aid package has enabled UT Southwestern to attract qualified minority candidates to that school. "It's been a big benefit," she said.

Ms. Schatte says TMA awards roughly 30 scholarships each year through its scholarship programs.

For more information about TMA's loan and scholarship programs, visit TMA's Web site at  www.tmaloanfunds.com  or call (800) 880-2828. For information about donating to the TMA Minority Scholarship Program, visit the TMA Foundation Web site at www.tmaf.org or call (800) 880-1300, ext. 1664, or (512) 370-1664.

Ken Ortoloncan be reached by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by e-mail at  Ken Ortolon .

 

SIDEBAR

TMA Offers Wide Array of Loan, Scholarship Programs

The Texas Medical Association provides a wide range of financial assistance to medical students and resident physicians. The loans and scholarships listed here are administered through the TMA Educational Scholarship and Loan Committee. All new applicants must obtain a brief interview with a trustee of the funds.

Dr. S.E. Thompson Scholarship Loan Fund

  • Available to students attending The University of Texas System medical schools only.
  • Students may borrow a lifetime maximum of $3,000.

May Owen Irrevocable Trust Loan Fund

  • Available to students attending Baylor College of Medicine, Texas A&M University System Health Science Center College of Medicine, Texas Tech University Health Sciences Center, and the University of North Texas Health Science Center at Fort Worth.
  • Students may borrow a lifetime maximum of $4,000.

TexasMedical Association Alliance Student Loan Fund

  • Available to students attending any medical school in Texas.
  • Students may borrow $4,000 annually with a lifetime maximum of $8,000.

TMA Special Funds Foundation Medical Student Loan Fund

  • Available to students attending any medical school in Texas.
  • Students may borrow $4,000 annually with a lifetime maximum of $8,000.

TMA Special Funds FoundationDurham Student Loan Fund

  • Available to students attending any medical school in Texas.
  • Student must be a Texas resident.
  • Students may borrow $4,000 annually with a lifetime maximum of $8,000.

Patricia Lee Palmer, MD, Memorial Resident Loan Fund

  • Available to residents training at any accredited Texas residency program.
  • Applicant must be a single female.
  • Residents may borrow $3,000.

TMA Minority Scholarship

  • For minorities underrepresented in Texas medical schools and the state's physician workforce.
  • Recipient must be an incoming freshman.
  • Applicants must complete an application, provide a letter of acceptance from their school, and write a 750-word essay explaining how as a physician they would "improve the health of all Texans."
  • Annual awards range from one to six scholarships of $5,000 each.

HarrisCounty Medical Society Alliance Scholarship

  • Available to third- and fourth-year students at Baylor College of Medicine and the UT-Houston Health Science Center.
  • Recipient must be a U.S. citizen.
  • Awards to be issued in increments of no less than $500 per medical student.
  • Funding available through the Harris County Medical Society Alliance and administered by TMA.

Louise Barekman Scholarship

  • Available to first-, second-, and third-year students who are members of a Protestant church and have a record of regular church attendance.
  • Applicant must exhibit genuine financial need.
  • Applicant must be a resident of Texas.
  • Awards rotate to Texas medical schools according to an established cycle.
  • Normally two annual scholarships are issued in amounts ranging from $400 to $800 each.

TMA 50-Year Club Scholarship

  • Available to second-, third-, and fourth-year students at all accredited Texas medical schools with rotation according to an established cycle.
  • Applicant must be a U.S. citizen.
  • Funding available through TMA 50-Year Club dues.
  • Awards to be issued in increments of no less than $500 per medical student. This program was established in 2005 and likely will provide two scholarships per year.

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