Accept CNUCOM or Reapply

[DrMidlife]

Did CNU provide their comparative analysis of their private lenders' repayment terms vs. REPAYE, PAYE, IBR? Did they disclose that you are not eligible for forgiveness under these programs?

Did they disclose that you are not eligible for PSLF?

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[gyngyn]

Having a teach out plan is required of any new LCME school. It's federal law under the Higher Education Opportunity Act.

I wasn't referring to the teach out plan, though.
The Teach Out is developed by the school.

 

[edgerock24]

The university administration was of the belief that the private loan terms they had secured for students were on par with or were better than those for federal loans. Given that signing on to Title IV would have created substantial legal and bureaucratic costs for the school, which translate to risk, restriction, and cost in time/money, it was felt that that signing would not be in the best interests of the school, nor the students whose tuition and available services may have been negatively effected by the school's expenditures of time and money without students seeing a commensurate benefit (at least in the assessment of administration).

It is incredibly naive to accept this for a fact. If this were true, more schools would be doing this/have done this in the past.

More importantly, as @DrMidlife stated, it is never a good thing for a school to decide for its students that they will be ineligible for loan forgiveness programs.

 

[NimbleNavigator]

I'm gonna be honest though - even if CNUCOM is corrupt, it's hard for me to care anymore. Why? Well, first of all the other medical schools aren't much better. Lots of schools charge 50k+ in tuition. Sure, they have federal loans, but you have to admit there's no reason why tuition should be that high other than greed. Don't give me that BS that it's expensive to train students and medical schools actually lose money blahblahblah. Pretty much every movie "loses" money and yet somehow the directors, producers and actors get millions. I see no difference between movie executives and medical school leadership other than the fact that movie executives are at least honest enough to not pretend that they have the moral high ground.

The increases in price of tuition have vastly outpaced inflation. In 2002, tuition at UCSD was $10,000. In 2016 dollars, that's $13,200 [1]. And yet somehow tuition is now $37,000 a year. [2] I wish I could do a more detailed analysis but frankly that would take longer than I consider to be practical.

Also, the AAMC screwed us as premeds so hard that having an organization dedicated to putting students first is a foreign concept. Let's just consider the MCAT. For prep material alone, the profit margin is ridiculous. The MCAT prep bundle is around $200 [3]. In 2015, 60,000 people took the MCAT [4]. That's $12,000,000 per year on prep material alone. I'm willing to bet that most of that it straight profit - unless it really took millions of dollars to create the material (highly doubtful). Also, the material only needs to be created once. After that it really is straight profit. That's just prep material, too. As most of you well know, it also costs $300 to take the MCAT, which is pretty much unheard of among standardized tests.

Just look at this dude's face.

We'll call him "Greedy Darrell". You're looking at "Greedy" Darrell G. Kirch, the CEO of the AAMC, and he certainly looks like one smug little bastard. I have no idea how much Greedy Darrell makes in a year, but I'm certain it's in the millions.

One of my goals as a doctor will be to rally against the unfettered corruption in the medical training pipeline. I know it's easier said than done, but I for one think it's simply reprehensible that this rampant greed goes unchecked.

1: https://services.aamc.org/tsfreport...ee_sort&year_of_study=2002&select_control=PUB
2: https://services.aamc.org/tsfreport...ee_sort&year_of_study=2016&select_control=PUB
3: https://members.aamc.org/eweb/DynamicPage.aspx?Action=Add&ObjectKeyFrom=1A83491A-9853-4C87-86A4-F7D95601C2E2&WebCode=PubDetailAdd&DoNotSave=yes&ParentObject=CentralizedOrderEntry&ParentDataObject=Invoice Detail&ivd_formkey=69202792-63d7-4ba2-bf4e-a0da41270555&ivd_prc_prd_key=D13FF245-D0AE-4A02-B617-21B1A4387DA7
4: https://www.aamc.org/download/454206/data/mcatatglance2015.pdf

 

[basikfx]

Just curious, with CNU's private loan, does that mean your repayment plan cannot be based on income level?

 

[DrMidlife]

Just curious, with CNU's private loan, does that mean your repayment plan cannot be based on income level?

Generally no, private loans don't provide income-based repayment plans. You'd have to review the disclosures on private loans to see what they do or do not offer, and how their "features" compare or don't compare to federal loans.

If you just want to know if everything will be okay if you go to CNU and take these private loans, but you don't want to do any work to understand the details, then don't go to CNU. Accept that without doing the work to understand what you're getting yourself into, you are gambling with six figure debt by the end of 2nd year.

 

[aim-agm]

Generally no, private loans don't provide income-based repayment plans. You'd have to review the disclosures on private loans to see what they do or do not offer, and how their "features" compare or don't compare to federal loans.

If you just want to know if everything will be okay if you go to CNU and take these private loans, but you don't want to do any work to understand the details, then don't go to CNU. Accept that without doing the work to understand what you're getting yourself into, you are gambling with six figure debt by the end of 2nd year.

I'll second that, but also generalize it to most everyone going into med school though it is a bit more important at CNU in particular. Take the time to fully explore and understand your options with the financing school and have at least a general plan for how you will be handling those options. Accepted students really don't have anything else pressing to study for (you've already taken the MCAT and have years before STEP 1) so take the opportunity to get up to speed on this and other parts of your financial knowledge.

 

[Henry101]

Anyone that says that Title IX compliance has nothing to do with colleges having the best interest of their students is foolish and doesn't know what Title IX actually is. Title IX is SO MUCH MORE than a requirement for federal loans. It's about proper non-discriminatory policies, mandatory security report disclosures, meeting employee work condition guidelines, etc.
I don't think the LCME cares at all about this because they granted CNU a class expansion a month ago despite knowing that the school has no intention of trying to be Title IX compliant.

 

[aim-agm]

Anyone that says that Title IX compliance has nothing to do with colleges having the best interest of their students is foolish and doesn't know what Title IX actually is. Title IX is SO MUCH MORE than a requirement for federal loans. It's about proper non-discriminatory policies, mandatory security report disclosures, meeting employee work condition guidelines, etc.
I don't think the LCME cares at all about this because they granted CNU a class expansion a month ago despite knowing that the school has no intention of trying to be Title IX compliant.

Actually LCME requires much of what Title IX does. For example, it requires that schools abide by FERPA regardless of whether they are receiving federal funds. So LCME does care about many of these things very much and CNU is in compliance with them.

 

[gummychocos]

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[aim-agm]

It is incredibly naive to accept this for a fact. If this were true, more schools would be doing this/have done this in the past.

More importantly, as @DrMidlife stated, it is never a good thing for a school to decide for its students that they will be ineligible for loan forgiveness programs.

I accept as fact that that was their belief, not that the belief was accurate. Since the med school will be eligible to apply for Title IV at the end of the coming year, the students will possibly revisit the issue to determine whether we should push for that application.
As to why CNU is among the few schools that turned it down, I can't reliably comment. It's quite probable the terms were a lot more onerous than is usual because CNU has "for-profit" status. Also, given how much concern CNU not having federal loans has generated, I'd imagine many institutions feel strongly pressured to sign on even if it isn't the best idea.

I agree that denying access to federal forgiveness was suboptimal, it's always better to have options...though that's ignoring the cost:benefit of those options.

@aim-agm I'm really, really interested in why 'access to federal loans would on balance ultimately not have benefited us'. Is that just more administrative work for the short term? Wouldn't it be better for the school in the long term to have these kinds of fin aid options for students to attract more people to apply? A lot of students are turned off by just this. If they're already compliant with what LCME requires, is getting TitleIX that much more work for the benefit of the students? I'd pay for the higher tuition if it meant hiring more people to get this done and allowing students to get federal loans.

This is based on deduction, so take it with a grain of salt: I believe it would have incurred a lot more administrative work in the short term followed by a significant amount permanently. This work would have been on top of what is being done for the LCME, given that it is independent from the government so it has it's own compliance bureaucracy. The school would also have to review compliance constantly, rather than periodically, since the gov could audit at any time (and those man-hours are expensive). Also, the requirements are probably also a lot broader and more detailed for the U.S. Gov than the LCME, given that LCME regulations are not all that long but the contract for Title IV the gov sent was hundreds of pages long.

I don't see the the benefit of access to federal loans if it means you ultimately pay more. Also, federal loans might benefit those who use them but even the students that don't will be paying higher tuition which is hardly fair to them. That said, I don't know the specific numbers play at this time, I will update if and when I do (though don't hold your breath, it would be months before it's pertinent for me to thoroughly look into this).

 

[gummychocos]

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[GnomeBeGone]

This is speculation (I'll leave it to master negotiator aim-agm to get to the bottom of it), but I think in addition to what was mentioned (i.e. compliance costs, which I agree with DrMidlife that this is not a compelling argument in the longterm), two contributing factors may have been that:

a) Around that time, our head of financial aid took a job at a larger institution and left a vacuum of expertise at a critical time.
b) (again, this is 100% speculation - I don't know what the actual rules for this are) The college of medicine might have run afoul of diversity guidelines if they accepted the offer this year since the inaugural class has some areas of skew (gender, mainly) that are artifacts of the compressed admissions cycle last year.

The details are escaping me since this was all a few months ago now, but I also recall hearing something ominous sounding along the lines of if we lose federal loans for any reason now, the ramifications are much worse than if we just never got them.


I suspect their reasoning for why "access to federal loans would on balance ultimately not have benefited us" is that since the private loans have the potential to beat federal interest rates with relative ease depending on credit history (for perspective, my credit score is like ~730-740 , no co-signer used and I got 6.25% for M1 loans, 5.875% for M2 loans with iHelp Select loan). Then add to that what DrMidlife said about not wanting to pay for administrative costs and this might have been how they arrived at their decision.

As I said earlier, I was personally disappointed about this since enrollment in Title IV loan programs gives eligibility for other fringe benefits such as in-school deferment of existing federal loans and PSLF. More importantly though, the federal loans don't cap out as early as the private loans (~275K?), which negates the need to spread across multiple borrowers later on. And a second problem of not having the federal loans is that, while the bar for credit worthiness wasn't particularly high for the CNU-negotiated loans IMO, there are those who may still not make the cut. I recall a poster on SDN last year who was accepted at CNU and Touro-CA -- they wanted to come to CNU, but did not get approved for the private loans since they had a Mortgage (in CA, so I imagine a fairly large debt load) + family + graduate loans, so this person had to decline and stay at Touro for federal loan availability. In these more unusual circumstances, federal loans are a good safety net to have available to students.

For those two reasons, I do intend to make a case to the school about reconsidering federal loans when it's next eligible.

(For anyone wondering, what you can do with existing federal loans with no in-school deferment is this: You apply for income-based repayment --> $0 income --> monthly payment goes to $0 --> interest accrual is marginally worse than if you were not making payments on a typical in-school federal loan deferment)

 

[GnomeBeGone]

For anyone wondering what the particulars are, I was able to hunt down two loan disclosures from when I was shopping around on loans. Keep in mind that the quoted rate ranges are based on my credit history.

Also, it's not mentioned in that document, but
- the iHelp Loans have a 6 month grace period + 48 months in-residency deferral.
- there's no pre-payment penalty on iHelp so you can pay off your loans much more prudently (i.e. faster and with way less total interest accrued) than what's shown in the repayment options screenshot.

 

[SigmaFS]

I'm not aware of any U.S. medical, dental, pharm, vet, law school that's opted not to participate in Title IV financial aid (ie, federal loans at the graduate level). Raises so many red flags. Purely speculative, but does CNUCOM have a revenue sharing agreement(s) with their participating private lenders? Schools participating in Title IV programs are expressly prohibited from recommending lenders, no less revenue sharing.

The school position is a disservice to its students and ethically untenable, imho. Why not allow students a choice - federal and/or privates loans? And has been mentioned, federal loans offer flexibility:

• No aggregate limit on Graduate PLUS
• Income driven repayment options
  • REPAYE offers a 50% interest subsidy on any interest accrual while in repayment. Significant benefit while in residency.
  • PAYE caps interest accrual to no more than 10% of your original principal federal loan balance should you opt out of PAYE. Something to consider when your an attending and considering refinancing to a commercial lender.
• PSLF
• Competitive rates - beginning July 1st - Direct Unsub 5.31%, Direct Graduate PLUS 6.31%
• With rare exception, no co-signer requirement
• 3-year forbearance provisions, if necessary

Given what I've read, I don't see compelling justification for private loans only.

 

[DrMidlife]

Hey just so people know who that was, he's a financial aid director for a dental school and a tax professional.

By all means, premeds, keep posting why it's okay that CN is doing what it's doing, and why the grownups don't know what they're talking about. Because it's adorable. Sooooo cute.

 

[GnomeBeGone]

@SigmaFS , thanks for sharing. So what *could* cause a school to lose Title IV loan programs once acquired (assuming hypothetically that there was some truth to what we were told)?
I'd love to have some ammo to put into the student year-end improvement summary. Current students are actually re-requesting federal aid, I only hoped to offer prospective students more objective information/insight than they're likely to find anywhere else on SDN.

In theory, revenue sharing is prohibited (see below), since I'm assuming the term "agent" is broad enough that it covers the Board of Trustees, but correct me if it doesn't.

http://pharmacy.cnsu.edu/student-services/financial-aid-office/student-financial-aids

Excerpt:
" Provisions
1. The School and School Employees are prohibited from participating in any revenue-sharing arrangements with any lender.
2. School Employees with any responsibility in the financial aid office are prohibited from soliciting or accepting gifts from a Lender in an amount that exceeds a monetary value of $10.00. Standard material, activities or programs on issues related to a loan are exempt. The term “gift” does not include food, refreshments, or training, entrance and exit counseling that does not promote the products of any lender or fund administered on behalf of a state.
3. School Employees with any responsibility in the financial aid office or with a responsibility with respect to Loans are prohibited from receiving any fees, payments, or other financial benefit (including stock options) from any Lender as compensation for any type of consulting arrangement or other contract to provide services to a Lender or on behalf of a Lender relating to education loans. "

Definitions

• “School” refers to all colleges, branches, campuses, departments, and other components of California Northstate University (CNU).
• “School Employee” or “Employee” refers to any CNU officer, employee, and agent of CNU.
• “Lender” refers to any entity involved in originating, holding, servicing, consolidating, or guaranteeing an educational loan to students to finance higher education expenses.

 

[Throwaway41785]

Hey just so people know who that was, he's a financial aid director for a dental school and a tax professional.

By all means, premeds, keep posting why it's okay that CN is doing what it's doing, and why the grownups don't know what they're talking about. Because it's adorable. Sooooo cute.

Most of the people arguing in favor of attending CNU aren't defending their financial aid policies. Ultimately, the onus to make sure CNU is acting ethically in its relationships with lenders and students is on the LCME, not the students. If a student can afford to take out the private loans and that student was not accepted anywhere else, it is in that student's best interest to go to CNU and that's a no brainer.

The notion that residency directors around the country are all on SDN aware of all of the things that we're discussing, or examining all of the flaws that every single school has is absurd. When a CNU student applies for residency, they will be looked at as a graduate of a new program and otherwise looked at by their individual merits.

For an applicant that is accepted, declining their acceptance could shut them out of getting into an allopathic medical school forever. On AMCAS, they will be marked as an applicant that was accepted and turned down an acceptance. Adcoms that are advising OP to turn down their acceptance are doing so out of their own disdain for CNU, not the best interest of the student.

OP, take your acceptance and run with it. Recognize the interest of SDN adcoms and their bootlickers are not the same as yours as a medical school applicant.

 

[deleted709753]

Hey guys,
I had a 3.46 GPA from UCB and 38 MCAT (I will have to take it again, but I am confident I can maintain or improve my score). Therefore, I believe I should be able to get into a medical school with a better reputation. Thank you.

In your particular situation, with such strong stats, I would recommend re-applying so you have no regrets.

I applied for CNU's inaugural class, interviewed there, and was rejected. I decided not to re-apply to CNU for this cycle. I received 3 US MD interviews and was accepted to my top choice school.

I have nothing against CNU because at the time I applied there, I really wanted to go there and was disappointed I didn't get in. After getting rejected by many schools last cycle, I got caught up in the desperation (strong but accurate word) and wasn't thinking rationally.

I decided not to re-apply to CNU because I didn't think I would be happy there. After visiting other US MD (and DO) schools, I just kept thinking about how CNU doesn't compare. The question is: would you be happy at CNU? If you personally liked the CNU campus, students, faculty and staff, then that is the most important thing! I'm sure CNU will produce a certain percentage of graduates that match into competitive residencies at strong academic institutions.

I commend CNU's advocate posters on here who are remaining cool-headed in defending their school. If you didn't have such strong stats, I think people would be more supportive of you attending CNU.

 

[GnomeBeGone]

@20Hopeful16 - Thanks and Congrats!