Student Loan Question

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subedude

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Hi all, I'm a little confused about the Federal student loan system. I think I have something figured out, but I'm not sure if it's 100% accurate. Well, here's what I imagine my situation to be, and you can tell me what's wrong with this plan...thanks in advance..

-OK, I figure I'll need about $150,000 total for optometry school, and I'll probably take the federal loan route at 6.8% interest. So my understanding is that according to my FAFSA application, I may given a certain "Subsidized" amount, which has a maximum, and the remainder of my loan will be "Unsubsidized." For the unsubsidized portion of loan, I'll be entirely responsible for the interest, which I figure I'll pay off while I'm in optometry school. Then, once I'm graduated and get a job, I start paying off my principal loan amount, of which I can extend the payment over a 30-year period?????

- Please let me know if this is a correct "plan" or "scenario" or whatever lol..I appreciate all the help.

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Hi all, I'm a little confused about the Federal student loan system. I think I have something figured out, but I'm not sure if it's 100% accurate. Well, here's what I imagine my situation to be, and you can tell me what's wrong with this plan...thanks in advance..

-OK, I figure I'll need about $150,000 total for optometry school, and I'll probably take the federal loan route at 6.8% interest. So my understanding is that according to my FAFSA application, I may given a certain "Subsidized" amount, which has a maximum, and the remainder of my loan will be "Unsubsidized." For the unsubsidized portion of loan, I'll be entirely responsible for the interest, which I figure I'll pay off while I'm in optometry school. Then, once I'm graduated and get a job, I start paying off my principal loan amount, of which I can extend the payment over a 30-year period?????

- Please let me know if this is a correct "plan" or "scenario" or whatever lol..I appreciate all the help.

You do not have to pay on the interest while you are in optometry school, though in the unsubsidized portion, the interest will continue to accumulate. In the subsidized portion, the interest does not compound.

I recommend that you not try to pay off your student loans during optometry school. If you have excess cash during optometry school, from whatever source, I recommend that you save it for when you graduate because then life's expenses will really start coming at you and your student loan payments are not going to be a top priority. I believe you are wise to spread the loan repayment over 30 years.
 
I thought the subsidized portion was taken care of federally? I shouldn't have to worry about the interest there..only the principal right? Also, I probably won't have extra cash during optometry school but if it's at all possible I think it would be a better idea to pay off at least the interest while in school because like you said, if I don't it will compound..and I used one of those calculators to see how much I'd be paying in interest over a 30 year period and it was over $200,000!!!!! As oppose to if I paid the interest while in school, it would only come out to be a fraction of this, so to me it seems like a worthy sacrifice you know??? But other than that, does everything seem good???
 
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I thought the subsidized portion was taken care of federally? I shouldn't have to worry about the interest there..only the principal right? Also, I probably won't have extra cash during optometry school but if it's at all possible I think it would be a better idea to pay off at least the interest while in school because like you said, if I don't it will compound..and I used one of those calculators to see how much I'd be paying in interest over a 30 year period and it was over $200,000!!!!! As oppose to if I paid the interest while in school, it would only come out to be a fraction of this, so to me it seems like a worthy sacrifice you know??? But other than that, does everything seem good???

It will not be a worthy sacrifice because there will be other loans in your future, and there will be other costs and debts that will be far better served by any excess money you accumulate than your student loan will be.
 
I guess I'll just see what I can afford and go from there..aside from that...is that how the system works?? is it ok??
 
the problem with that plan is you cant just say; ok i will pay off all the interest now and then pay off the principal in the next 30 years... the interest will keep accruing the entire time you owe any money at all... so for the subsidized part you dont accrue any interest in school but the 30 years you are taking to pay it off you will owe 30 years of interest... the unsubsidized part you will start accruing interest while in school, and even if you pay off some each month you will just keep accruing more and more.... plus pretty much none of my friends have extra money that they can just use for stuff like that... there are a lot of unforeseen costs in attending school such as travel money, money for books, equipment etc....
 
is there any way to completely pay off the interest while in school?
 
no there is not??? how can you??? 30 years of interest on a 150 k loan is going to be tens of thousands of dollars???
 
is there any way to completely pay off the interest while in school?

There isn't a set amount of interest you will owe, because it is calculated every month. Even if you did manage to pay the interest payments every month during your school career (again, not a smart idea), the minute you get out, you'll still have interest added to your balance every month, until you pay it off. The interest amount that will be added from your four years in school is a drop in the bucket when you consider all of the loans you will ever have in your life (student loans, mortgage, practice loans, equipment loans, car loans, etc). Listen to the others and save whatever extra money you have.

(Sending it to me is also an option :idea::zip: <-- shameless use of new smilie)
 
ohhh....so if you choose to pay the interest while in school, you have to tell them ahead of time how long you will take to repay your loan? for example, if you choose to pay back your loan in ten years your interest payment during school would be less than if you choose to pay your loan back over thirty years?
 
ok, sorry, that last response was directed towards cunikki..now to prettygreeneyes..how is it that they can provide you with an option to pay the interest while in school if like you're saying, there's no set amount of interest???
 
ok, sorry, that last response was directed towards cunikki..now to prettygreeneyes..how is it that they can provide you with an option to pay the interest while in school if like you're saying, there's no set amount of interest???

What I meant by no set amount of interest is that the interest will continue to accrue for the life of the loan, so you can't just completely pay off all of the interest while in school and then worry about the principal when you get out. Perhaps we are misunderstanding each other... :oops:
 
I think I understand what you're saying..I guess I just don't understand their way of saying you can pay off the interest while in school if, like you said, when you're out of school, the interest will continue to accrue as long you still have principal to pay
 
I think I understand what you're saying..I guess I just don't understand their way of saying you can pay off the interest while in school if, like you said, when you're out of school, the interest will continue to accrue as long you still have principal to pay

They aren't saying you can PAY OFF the interest, just that you can pay the interest that you accrue while you are in school BEFORE it is added to the principal amount. You'll still have interest for the life of the loan.

I did some digging in the Financial Aid forum - here is a link to some of the best financial aid threads and sites that SDN members have compiled.

http://forums.studentdoctor.net/showthread.php?t=69485

If you still have questions, the posters there have far more experience than I do!
 
thanks for your help..ill check the out
 
thanks for your help..ill check the out

everbody's right.. there's really no point in trying to pay off interest while you're in school. It's just going to cause you more of a headache than it's worth. Let the amount accrue and worry about it when you're out making "real" money.
 
Go to the following website and scroll down to the calculator. Put in any amount, the interest rate, and the number of years you plan on paying on that loan (i.e. 10 to 30 yrs). The calculator assumes you'll be paying at least $50 a month on the loan, just leave that space as is. Make sure you click "yes" on the "print payment schedule". You'll see how much of each month's payments go to just paying on the monthly accrued interest and how little actually goes to principle (very little when you first start paying on the loan).

http://www.finaid.org/calculators/loanpayments.phtml
 
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