How to Best Take Advantage of Full Scholarship

[TSSVR4]

I am very lucky to have gotten a full scholarship to my in-state school and am wondering how to best take advantage of my financial situation.

Here is where I stand:

1.) Full scholarship without living expenses to a USMD state school. Has a few strings attached, most importantly the requirement to spend 1 year post residency working for a low income community clinic OR work in an under-served environment for at least 20% of your time for five years (once a week?). Either option must be completed in-state.

2.) No other loans.

3.) Conversely, little savings. I only have a car.

4.) Have good working knowledge of rentals and investment. My family owns a few and is pushing me to live in a new home they would pay a down payment on and have me recruit 3 other M1s to live and pay for the mortgage.

5.) I dislike my home state and am a little bummed out at having to return to suburbia after having living in a major city. I wouldn't mind fleeing back to the city as soon as the 'commitment' is done. Consequently, I am very tempted to make up for the location by being a little more spend happy in medical school...

What should I do about my living situation? Is there any other way to maximize the fact that I will graduate with little debt (just living expenses?) Best way to cover living expenses (repay my own parents or just take out the loan?) Work in the summer or on the side? Should this impact my residency choice? Which choice to fulfill the requirements of my scholarship is better?

Living at home is not an option.

Thank you

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[The White Coat Investor]

What a great opportunity to minimize your debt!

I think the first thing to address is specialty choice. If you end up wanting to do primary care, then great, you'll basically trade one year of time for quite a bit of money. A low income community clinic like a CHC is pretty easy to find a job at for an FP, IM, Peds, or OB/GYN. If you want to be a specialist, then you're going to have to do some kind of under-served environment. Better find out exactly what those rules are before taking this "scholarship." Remember, the military gives out "scholarships", then sends you to underserved places, like Afghanistan, too. But assuming this scholarship is on the up and up, and you want to spend a year in an underserved place, it might be a great option.

Living situation: Med students really aren't in a position to buy a house. What happens if it needs tons of remodeling or you can't sell it easily when you move to residency or the market drops 50% or something? Buying a house, paying the mortgage, and selling it in 4 years isn't exactly a recipe for getting rich. Unless you can somehow get the renters to pay for the mortgage and all the other expenses too, then you may not do very well. Remember there are more expenses involved in owning a home than just the mortgage. I owned a place in med school. I would have come out way ahead if I had rented instead. But hey, you could do well, it's just about buying it at the right price and managing it well. If you have experience in this, it could be a good idea. But real estate is a cash intensive business. If you don't have cash when you need it, you go out of business very quickly.

Don't plan on working in the summer other than your first one. You can do a little work on the side during MS1, MS2, and MS4, but don't plan on a lot of it. If your parents are willing to pay your living expenses, then take them up on the offer.

Did you get into other medical schools in a city you'd like to live in? If not, doesn't sound like you have much choice. If so, how much will it cost you to go live there (difference between your total cost of school with the scholarship at the state school and the cost at the fancy-pants big city school with all the loans and higher living expenses)?

If I had a scholarship that paid 4 years of tuition in return for one year doing whatever (and whatever paid some kind of reasonable salary and didn't affect my desired specialty) I'd take it.

 

[TSSVR4]

Living situation: Med students really aren't in a position to buy a house. What happens if it needs tons of remodeling or you can't sell it easily when you move to residency or the market drops 50% or something? Buying a house, paying the mortgage, and selling it in 4 years isn't exactly a recipe for getting rich.

My parents live in the area and they already have investment homes. They are trying to purchase another one anyway and are trying to convince me to get it in my name (they would pay for the downpayment) and have me live in it. Their reasoning: Rent around the medical school is roughly $600-800 with utilities. If I were to live in a house with three other medical students paying $500/month with utilities I would live free while the house would get paid for. Emergency expenses for the house are not a concern as they would take care of this. If they were going to rent the house to a single family, it would rent at maybe $1200/month.

Their argument is that I would lose 600/month to rent and the house that they are renting would net $300 less a month for a combined loss of roughly $10,000 a year. All non-housing expenses would come out of loans, including rent if I were not to live at this propose house.

Unless you can somehow get the renters to pay for the mortgage and all the other expenses too, then you may not do very well.

It'd be a long term property that would revert to the care of my family when I leave for residency.

I owned a place in med school. I would have come out way ahead if I had rented instead.

If you don't mind me asking, did you have significant savings (other than what you put down) before you bought the home? Or did you come out of undergrad?

Did you get into other medical schools in a city you'd like to live in?

Yes - pretty much every other school I got in is higher up on my list. However I have not (yet) received my financial aid results. But I don't anticipate a merit scholarship anywhere. The scholarship I did get from my state school that we are discussing is a (sort of) diversity scholarship that is not limited to URMs (I am not one). I am dying to know if schools match diversity scholarships.

If so, how much will it cost you to go live there

200k+. Please tell me the debt is worth 4 years of.... not misery, but boredom & 'missing out' on the city life as a very city oriented person. Rationally I know it very much is worth it, but I frankly don't know the value of a dollar. My parents are generous to me and I have been fortunate to earn a full ride for my undergrad institution as well.

I really want to make smart decisions and take control of my finances intelligently, but I'm caught between wanting to

1.) live in the city - I know this is stupid without a scholarship match
2.) wanting to at least live with most of my classmates in a fun rental community near school if I'm going to be stuck here, or
3.) make the "smart" financial choice and get my own place.

I just fear #3 will isolate me from my classmates and won't even be the smart thing to do in the end financially.