Advice on using loans for cost of living. How do you do it?

[ptlover]

This may seem like a very silly question. But I know that as a DPT student it is best that we do not work. With that said after FAFSA is filled out etc. How do you decide what loans to take out and how much you'll need for the year? What is your average yearly budget of loans that you use to live off of? How do you pay for your apartments, food, etc? Any advice? I guess I am just a little confused on how to survive without working! My apologies if this has been discussed before but I have searched the forum and haven't found much related to this part of living. I will also be contacting the financial aid office of the school I attend, but I want to go about this in the smartest and most efficient way possible. I want to make sure I do not make mistakes or miss something I should know. Thanks so much in advance!

---

Members don't see this ad.

 

[noyceguy]

Stafford loans max out at about $20,000 a year. Subtract your tuition and fees and fees and that is what you have to live on. Borrow more funds from other lenders as needed (grad PLUS, private lenders, etc.)

 

[hmmmatt]

The Grad Plus loan is the wisest option in most cases. That's what pretty much everyone uses to pay for their cost of living. The main reason this is the best option is because you have many choices on repayment and consolidation due to it being a federal loan. For example, one route many people take that end up with a lot of debt after PT school is to consolidate all of their federal loans into one big loan with a lower interest rate. This may or may not be a wise option for you, it would depend. Along with consolidation, you can apply for different repayment programs, such as the Income Based Repayment (IBR) program. This lowers your monthly payment to something more manageable with your salary. With income based repayment, or any of the other lowered repayment options, a smart program to look into is the Public Service Loan Forgiveness (PSLF) program.

Basically, you pay as little as you can through IBR while enrolled in the PSLF program and after 120 monthly payments (10 years) the remained of your student loans are forgiven. Tax free. You just need to work in a clinic that qualifies for the PSLF program, which many do. This is different that if you were to, for example, do IBR for 25 years and then your loans are forgiven, but in that case the forgiven amount will be taxed.

As for how much to live on, that's going to be up to you and your area's cost of living. That's just something you need to run the numbers on. Every PT student I know (except for the lucky ones with super rich parents) pays for their apartment/food/gas/textbooks... everything with grad plus loans.

 

[CH2014]

Question for anyone who has had to move for PT school, especially out of state: how did you did manage initial moving costs like security deposits and furniture? Did your loan refund come through before school started?

 

[ptlover]

Question for anyone who has had to move for PT school, especially out of state: how did you did manage initial moving costs like security deposits and furniture? Did your loan refund come through before school started?

I wonder this too.

 

[lovepixie]

I had money saved up and a lot of help from my family. My loans did not come through until the friday after class started

 

[CH2014]

Thanks, that's what I was afraid of. Guess I need to find a good summer job

 

[engmedpt]

Question: I assume stafford, then small grad plus for the remainder each year is wisest? Ill be paying roughly 23,000 a year. If stafford maxes at 20k, is it still fine to take a small grad plus loan at 3k or is there a minimum? I assume the only difference between the loans as well are interest rates? I can qualify for IBR anywhere that is PLSF or consolidate all of those loans together, ect.? Also, this sounds stupid but when you say the remainder of your loans is taxed after 25 years when they are wiped clean, you mean you just have to pay the excess tax leftover right?

 

[ptlover]

Just out of curiosity, does anyone take out private loans for rent etc? Or how much extra roughly do you take out for apartment, gas, food etc? I am just not sure? Just curious, i know its depends on the individual, but any ball park number you can give me helps

 

[jdaniels360]

I take out the max amount each semester and give back whatever i don't use at the end of said semester. That way you're covered incase you need extra for something. Sure, you pay a small amount of interest for holding onto that extra $$$ past 120 days (interest free period to return the money).

 

[jdaniels360]

Also, anyone know if there's any negatives to consolidating stafford and grad plus loans after all is said and done into one? Or is it all one since its government issued anyway?

 

[engmedpt]

^This

 

[Dragon416]

So what does some think of paying out of pocket and a payment plan that is offered by the school? That is what I am doing to avoid the scams of interest rates.

 

[noyceguy]

So what does some think of paying out of pocket and a payment plan that is offered by the school? That is what I am doing to avoid the scams of interest rates.

Think of it like this. If you have the money already to pay out of pocket, then the interest rate is the price you pay to hold onto your money for a longer period of time. That way, when the inevitable large unexpected cost comes up, you will actually be able to pay it.

 

[DesertPT]

Question: I assume stafford, then small grad plus for the remainder each year is wisest? Ill be paying roughly 23,000 a year. If stafford maxes at 20k, is it still fine to take a small grad plus loan at 3k or is there a minimum? I assume the only difference between the loans as well are interest rates? I can qualify for IBR anywhere that is PLSF or consolidate all of those loans together, ect.? Also, this sounds stupid but when you say the remainder of your loans is taxed after 25 years when they are wiped clean, you mean you just have to pay the excess tax leftover right?

There is no minimum amount of PLUS loans you can borrow at a time. In practice, the interest rate is the only major way they differ but there are technically other ways they differ as well. And yes, forgiven loans after 20-25 years are taxed. Forgiven loans after 10 years of PLSF qualifying payments are not taxed IIRC.

 

[DesertPT]

I take out the max amount each semester and give back whatever i don't use at the end of said semester. That way you're covered incase you need extra for something. Sure, you pay a small amount of interest for holding onto that extra $$$ past 120 days (interest free period to return the money).

This is what I've done throughout college as well. Just to make sure I always have what I need. Just resist the temptation to blow the money you should be giving back on something stupid! lol

Also, anyone know if there's any negatives to consolidating stafford and grad plus loans after all is said and done into one? Or is it all one since its government issued anyway?

Loan consolidation is actually relatively complicated and their are different pros and cons to doing so for everyone depending on your circumstances. You just have to research it thoroughly and decide what the best option for you is.

 

[aroszko]

Question for anyone who has had to move for PT school, especially out of state: how did you did manage initial moving costs like security deposits and furniture? Did your loan refund come through before school started?

Money dosnt kick in till school starts so you'll have to save up for the initial costs unfortunately.

 

[PT2Bee]

I take out the max amount each semester and give back whatever i don't use at the end of said semester. That way you're covered incase you need extra for something. Sure, you pay a small amount of interest for holding onto that extra $$$ past 120 days (interest free period to return the money).

I just wanted to point out that you DO NOT have to do this. Whatever you are awarded each year is yours to take out. I was awarded a ridiculous amount (70k). I took out what I thought was enough (around 48) but ended up needing a little more. I emailed my school's financial aid office with the additional amount (2k) I needed. A day later it was in my account. Do not add that interest.

 

[jdaniels360]

well whats the interest on keeping 2k ish extra a semester?

 

[DesertPT]

I just wanted to point out that you DO NOT have to do this. Whatever you are awarded each year is yours to take out. I was awarded a ridiculous amount (70k). I took out what I thought was enough (around 48) but ended up needing a little more. I emailed my school's financial aid office with the additional amount (2k) I needed. A day later it was in my account. Do not add that interest.

You are right, however there is a deadline for when each semesters loans can be dispersed (though it is pretty close to the end of the semester generally). I just have done it this way so that I don't have to figure out exactly how much I will need each semester and so I have an emergency fund of a few thousand dollars available at all times.

 

[PT2Bee]

You are right, however there is a deadline for when each semesters loans can be dispersed (though it is pretty close to the end of the semester generally). I just have done it this way so that I don't have to figure out exactly how much I will need each semester and so I have an emergency fund of a few thousand dollars available at all times.

I guess I don't really understand this logic. You're essentially paying the government to give you a security blanket. Yea you can give the money back, but now you have more accumulated interest. I just feel like it's more cost effective to spend 10 minutes to figure out how much you need to borrow for the year and maybe tack on an additional 2-3k for emergencies instead of saying just give me all of it. I did this my first year and it royally screwed me over and my school's financial advisor was shocked I did that lol. But, agree to disagree I guess.

Edit: It also depends on how much your max is. If you are still in undergrad, maybe this is why your statement didn't make sense. Taking out a max with only 3k or so left over is much different than taking out a max with 20k or so left.

 

[DesertPT]

I guess I don't really understand this logic. You're essentially paying the government to give you a security blanket. Yea you can give the money back, but now you have more accumulated interest. I just feel like it's more cost effective to spend 10 minutes to figure out how much you need to borrow for the year and maybe tack on an additional 2-3k for emergencies instead of saying just give me all of it. I did this my first year and it royally screwed me over and my school's financial advisor was shocked I did that lol. But, agree to disagree I guess.

Edit: It also depends on how much your max is. If you are still in undergrad, maybe this is why your statement didn't make sense. Taking out a max with only 3k or so left over is much different than taking out a max with 20k or so left.

Yes I am talking about undergrad, so I haven't been taking out excess in the form of PLUS loans. And the max amount I am offered each school year has only been a few thousand over what I needed to pay for the balance of my school and living expenses (after grants and working). It's not as huge as the amount you can get at once in grad school generally.

I personally believe it is wise to have a few thousand dollars in my savings account at all times, if at all possible. So yes I do pay the government a few dollars a month for that. It's not like I'm keeping tens of thousands in student loan money just sitting around.

 

[PT2Bee]

Yes I am talking about undergrad, so I haven't been taking out excess in the form of PLUS loans. And the max amount I am offered each school year has only been a few thousand over what I needed to pay for the balance of my school and living expenses (after grants and working). It's not as huge as the amount you can get at once in grad school generally.

I personally believe it is wise to have a few thousand dollars in my savings account at all times, if at all possible. So yes I do pay the government a few dollars a month for that. It's not like I'm keeping tens of thousands in student loan money just sitting around.

Ah gotcha, I was concerned you were doing that with grad school loans lol. And then I see your 'pre-PT' designation. It's been a long week and it's only Tuesday

 

[DesertPT]

Ah gotcha, I was concerned you were doing that with grad school loans lol. And then I see your 'pre-PT' designation. It's been a long week and it's only Tuesday

lol. With any luck I will be doing it with grad school loans in 6 or 8 months...jk I'm not actually to lazy to make a budget ha

 

[SunGiant37]

I guess I should start saving now. At least enough for a security deposit and one months' rent.

 

[pegasuscvc]

My situation is unique when compared to most PT students, but here it is:

I'm married, and we have a daughter. First, we picked our PT school very carefully. By the time we'd researched all the options out there, we only applied to 3 of them. Tuition is about 11k a year at my school. We also waived the school health insurance and went private since school insurance is always outrageously expensive, and we buy all books online, usually from half.com.

I go to school in the morning. When I get home, I study and babysit while my wife goes to work about 30 hours/week. We take out the maximum amount of grad loans (not grad plus). Since tuition is fairly low, we make the leftovers last the rest of the year. I have a graduate assistantship that pays $500 a month in exchange for working 10 hours/week at the school. Since we have a child, we also get around $4,500 at tax time. That's usually enough to pay for summer semester tuition so we don't need PLUS loans for summer.

Right now we have no PLUS loans, but as I said, my situation is unique. Most PT students don't have a spouse bringing in income or a child getting them a hefty tax return.