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If my husband and I have a lot of saving because we plan to buy house this year
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I would plan on the school expecting you to use a significant portion of that money to help finance your education.
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so you mean I can not get any loans or grants, that is unfair. We have been so thrifty in the past 10 years. could I buy a house in the next few month and appeal, or will the financial packag be better next year?
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I'm guessing you mean u will buy a house once you know where you'll be for med school at that place? Or after med school?
Anyway, assuming that means you can't buy the house before filling out financial aid forms, maybe you could put it in an account in your husband's name and file taxes separately? Not sure how much that would help, but yeah, financial aid is a bitch. How dare you be a responsible saver?!
But I think you should still be able to get loans though.
Anyway, assuming that means you can't buy the house before filling out financial aid forms, maybe you could put it in an account in your husband's name and file taxes separately? Not sure how much that would help, but yeah, financial aid is a bitch. How dare you be a responsible saver?!
But I think you should still be able to get loans though.
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Only the financial aid office at the schools you are accepted to will be able to give you any definitive information. Perhaps someone on here has been in the same situation but it really will be school-dependent. Fafsa, however, will determine your EFC when talking about federal loans.
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I almost know where I will go unless another school accepts me off the wait list (chance pretty low), but buying a home takes at least several month. So I need to submit the financial application now. We already filed tax together.
in the financial application, it always ask you to fill the saving from both you and your husband.
in the financial application, it always ask you to fill the saving from both you and your husband.
Your savings have nothing to do with your ability to get federal loans. You will be able to get loans up to the full COA.
Your saving may affect your ability to get institution based aid which could consist of loans, grants, or scholarships, but only your school can tell you that.
And if you haven't already, you can instantaneously put $20,000 in a roth IRA to protect it, $5K for each of you for 2012 and 2013. This money can then be taken out for either tuition or first time homebuyer w/out penalty
Your saving may affect your ability to get institution based aid which could consist of loans, grants, or scholarships, but only your school can tell you that.
And if you haven't already, you can instantaneously put $20,000 in a roth IRA to protect it, $5K for each of you for 2012 and 2013. This money can then be taken out for either tuition or first time homebuyer w/out penalty
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You can still take out loans, but if you have significant resources, loans at >6% might not be your best option. You should run the numbers with an accountant. Consider that in a few years home interest rates will likely go up again, and housing prices will likely adjust down again. You might find yourself losing any gains you thought home ownership would provide.
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You're telling me that you have enough money in that you are choosing to purchase a home and you think it's unfair you won't qualify for need-based aid? Are you being serious?
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'Thanks. I heard that too. We have a lot , about 300k so 20 k wil not have too much effect.
actually our income is not high, only about 100k/y now, much less before, but we are really thrifty. sign.
actually our income is not high, only about 100k/y now, much less before, but we are really thrifty. sign.
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we are old and have two kids going to schools, most people at our age has house. maybe more than one.
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On many finaid applications, there's usually a box for "Additional Comments" where you can list other considerations not adequately reflected by the rest of the app. You can explain the situation there. Also, many schools offer finaid sessions, and the finaid advisers are usually pretty accessible -- maybe talk to them about the situation?
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the reason we have not bought a house is that we always think we cannot stay in one place for a long time. May be we are wrong. I know several friends who had purchases houses in several places because of the relocation, they look fine now.
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I dont want my husband and children live uncomfortably because of me. I can take loans and pay back myself during and after residency. My husband will focus on the house, he is the main bread earner before and will be the sole one in the upcoming years.
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thanks for your suggestion. I called the school once, but the response is like if you have the luxury to purchase a property, then you might not need financial aid.
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Your school will not give you need based aid. If you have $300k you don't have any need. Get real. If that was in retirement accounts and 529 plans it probably would be considered protected and you might qualify, but it sounds like yours is not.
They can give you non need based scholarship money though. I had significant assets and a military scholarship and they still gave me a grant. It depends on how much they want you and what they have to offer.
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I dont think they will give me any non-need scholarship.
But if I used the money to buy a primary residency house and do not have savings anymore, (I feel I have some reason to say I need a house with two kids and with our age), the school still will not give me any need based aid?
But if I used the money to buy a primary residency house and do not have savings anymore, (I feel I have some reason to say I need a house with two kids and with our age), the school still will not give me any need based aid?
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You don't seem to get it...any mortgage rate you get right now will still be lower than the 6.8% you'd be paying on loans. It makes no sense.
And no, you have to put your assets down as well on most financial aid forms and having a 300K+ asset like a house isn't gonna win you many advocates in the financial aid department for need based aid.
I don't even know what you mean by your husband and children living "uncomfortably" because of you if you don't buy a house with that money. You have enough in assets that you'll qualify to buy a house unless you have terrible credit history. When they see you can put 20+% down it shouldn't be a big problem.
This. As a nontrad student, I feel your pain of looking at other people your age who are already established. But it makes no sense to buy a house when you could pay for your school in cash. Buying a house now will and taking out loans makes no sense in the long-term financially. Stafford loans are 6.8% and grad plus are 7.9%. Pay for your school and take out a mortgage if you must own a house right now. It makes way more financial sense. In reference to your family living "uncomfortably" they will live WAY more comfortably later on if you don't take out loans for med school.....
But, to answer your question. Your assets don't matter when it comes to filling out the FAFSA and getting enough loans to cover school. You can get as much stafford and grad plus as you need to cover cost of attendance, regardless of your efc. I know this because my wife and I own a house.
EDIT: you also need to think about the fact that you will probably be moving in 4 years for residency, buying will probably be more expensive than renting over that time period. There are calculators online that you can input the money and it will tell you how long you will need to live in that house for it be financially worth it.
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But the school loan/unit loan is 0 interest during medical school or even residency, let alone need-based scholarships,
do most schools expect your spouse to contribute the same percentage as the student himself?
do most schools expect your spouse to contribute the same percentage as the student himself?
Not true at all. There are no federal subsidized loans for grad students anymore. Stafford loans are at 6.8% and GradPLUS are 7.9% and both accrue during med school and residency. I agree with everybody else here that you should put your money towards school tuition and just rent for now.
As someone said earlier, med school financial aid from the gov't is always available up to the cost of school no matter how much wealth you have. I am in the same boat (30 years old w/ household income way above the median) and I don't expect any need based money. We've already owned a home for 5 years and can probably pay for school without loans, however, I will still get Stafford loans to cover the entire cost and use them and repay them as needed because you never know what could happen with a spouse's job, etc...Also, it's a crappy thing to think about but if I die while in med school, the loans can be forgiven and my wife wouldn't be out of a lot of money like she would if we just paid the money.
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Your loans are deferred during medical school and residency, but it still accrues interest. At 6.8% and 7.9% for unsubsidized Stafford and GradPlus loans, respectively, you'll be much better off getting a 15 year mortgage at about 3%.
Since you have $300k+ saved up, there's no way you'll get need based institutional aid (which are usually at a lower interest rate). You can still apply for and receive merit based scholarships, however.
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Why are you expecting to get subsidized loans from the medical school?
You seem to misunderstand the purpose of need based aid. They're going to be giving out need based aid to the kids with no assets, no savings and 50K in undergrad loans already before they start doling it out to middle-aged parents with 300K in savings and a spouse who has a job.
Also yes, if you are married filing jointly your spouse's income information will be showing up as part of the tax return information you have to put on the FAFSA and school aid forms since you are both filing under one tax return.
Edit: lol I just saw where you said your income is 100K a year. So you have 300K in the bank and clear fairly close to 100K if he can write off a spouse and two kids on his taxes but you're asking if you're going to qualify for 0% need based loans from your school?
Yeahhhhh no. Just get a mortgage and write off the interest every year.
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Yea. Count out any kind of need based loans. The gov't is mostly in to helping kids, not people with existing careers and spouses with money. As a 30 year old, I think this is pretty fair. Even if you have a need, it's not the gov'ts fault if you screwed up your money for 10 years. It's a better investment for them to focus on young people. You obviously didn't screw up your money but at the same time, no one is going to feel sorry for you for not getting need based money. You don't have to go to med school.
Did you take out loans for undergrad? You don't seem to understand the system very well. It is not possible to get federal subsidized loans or grants for medical school. Those are for undergrad. I have never heard of a medical school giving subsidized loans to a medical student (maybe it's out there, but I have never heard of it). When you get you financial aid package from your med school, they will give you the max of unsubsidized stafford loans (6.8%) and then fill in the rest with gradplus loans (7.9%). The interest will start on these the second you accept them. If you are poor, you are eligible for need based scholarships. You mentioned an income around 100k, so you are no where even close to poor and you will not get these. If the school wants you bad enough, they can offer you a merit based scholarship. Unless you take out private loans for school, these are your options.
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There used to be subsidized stafford loans for medical students, but they did away with them a few years back
If your family make ~$100k last year and you have $300k in cash savings. your EFC is probably around $16,000 if you have 2 children. So if your school has a unit loan of $30,000 you MIGHT get ~$14,000 in subsidized school loans and this amount would likely go up each year as your savings/income go down. So it's not a complete wash. You'll likely get "something" if your school has a unit loan program.
But, the only way you can know is to fill out the forms and send them in. Nothing that anyone tells you on this forum is going to significantly change your EFC or current financial situation. You should feel extremely proud that you've gotten to the point that this is your biggest problem.
@jr93, it's probably a lot cheaper to take out a life insurance policy than to pay the interest on Stafford loans for all those years.
But, the only way you can know is to fill out the forms and send them in. Nothing that anyone tells you on this forum is going to significantly change your EFC or current financial situation. You should feel extremely proud that you've gotten to the point that this is your biggest problem.
@jr93, it's probably a lot cheaper to take out a life insurance policy than to pay the interest on Stafford loans for all those years.
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You want to borrow money at the lowest rate possible to meet your needs and save at the highest rate possible for the future.
That means you probably want to take at a mortgage at 3.5% (or less) and borrow for medical school at 7% and save with stocks and corporate bonds at 10%. If you don't take out the mortgage you're going to cost yourself $200,000 in forgone interest on bonds/stocks in order to save yourself $100,000 in interest payments on the mortgage.
That means you probably want to take at a mortgage at 3.5% (or less) and borrow for medical school at 7% and save with stocks and corporate bonds at 10%. If you don't take out the mortgage you're going to cost yourself $200,000 in forgone interest on bonds/stocks in order to save yourself $100,000 in interest payments on the mortgage.
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22 year olds have to go to med school?
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I doubt you'll get a 0% loan or a grant from you medical school because of the savings that you have. However, it doesn't hurt to wait and see. If you don't get anything from the school, I recommend taking the advice of others here and pay for school in cash, and get a lower interest mortgage.
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Do you see any 22 year olds in here making $100k/year with $300k in their savings account, complaining about the fairness of not receiving need-based aid?
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I lol'd. How old are you? 65? You are fighting against all the sounds financial advice that others here are trying to knock into you. Don't have much to add than to sit back with a big bag o'popcorn.
I already have life insurance. It is still in my best interest with the way we run our finances to get loans. Maybe I'm a risk taker but I'd rather continue contributing to our mutual funds with my wife's income that has a potential to earn much more than 6.8% and keep the compound interest tree growing. I don't want to dwindle our investments and savings for med school which I view as an investment anyway.
And prado, thanks for getting my point. Some people don't understand a simple point. Obviously no one HAS to go to med school but 22 year olds are more valuable than someone older like myself. Also, if you're 30 and blew your money, why should the gov't give you money anyway...you've already proven that you suck at managing it and may only be looking to medicine for the pay anyway which is a terrible motivator and you may be a higher risk for default. Investing in young people is always better than worrying about people that have had their chance to succeed and didn't yet. Even at lower middle class wages, people should have a respectable savings by age 30.
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Just remember that when you are applying for need-based aid, you are competing against people who don't even have a house to own or a spousal breadwinner. It may not be fair that having these assets is counted against you in financial aid calculations, but need-based aid is a rare commodity that generally goes to people who are in dire need. While it's unfortunate that you will have to take out loans to pay for medical school, it is not as if you and your children will be strapped for cash because you have to take out loans instead of getting need-based aid.
Even if you spent that money on a house now, you would likely have to still report your assets to the school and they will still take that into account.
Even if you spent that money on a house now, you would likely have to still report your assets to the school and they will still take that into account.
1) You will not get grants, unless you qualify for merit-based aid
2) The financially wise thing to do is to pay for med school out of pocket, and take out a mortgage for the house like a normal person. Unless you're enrolling in some ultra-high cost-of-living area, you should be able to drop ~100k (maybe less, maybe more depending on your needs) on a down payment and borrow the rest at 3.5%. It does not make sense to pay cash for a house (which pretty much nobody does) and borrow for med school at 7% or whatever the student loan rate is. If you can borrow at 3.5% and avoid paying out at 7%, you're basically the 3.5% difference in free money for yourself.
2) The financially wise thing to do is to pay for med school out of pocket, and take out a mortgage for the house like a normal person. Unless you're enrolling in some ultra-high cost-of-living area, you should be able to drop ~100k (maybe less, maybe more depending on your needs) on a down payment and borrow the rest at 3.5%. It does not make sense to pay cash for a house (which pretty much nobody does) and borrow for med school at 7% or whatever the student loan rate is. If you can borrow at 3.5% and avoid paying out at 7%, you're basically the 3.5% difference in free money for yourself.
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This is the key point. You are screwed no matter what unless you hide that money away. It'll most definitely count "against" you as either cash (which you have to report) or assets (which you also have to report). Sorry, but if you have a cache for buying a house, you're pretty much out of the running for need-based aid. Wanting to buy a house with tens of thousands of dollars rather than spending it on your education does not make you needy.
Summed up nicely. You probably shouldn't follow my advice. I'm in a weird boat and refuse to dip into well over 100k in investments to pay for med school. My wife also has a pretty good salary so most loans will be received and then paid off immediately by themselves but I'm still taking the loan. It'd probably be best for us to refinance to a 30 year loan too (15 yr now @ 4%) and put the extra money toward med school but I'm not going to do it because it's a headache. In the end, I'm not going to penny pinch over a few hundred dollars here and there. Luckily, me and my wife have no problem changing lifestyles to adjust for whatever comes at us. We went from making very little to making a lot and are now about to be back to very little expendable income. Just gotta roll with life and not make such a big deal out of things is my motto.
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Troll confirmed.
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This is not something you should do. Regardless, your parents would still report that income on the FAFSA (they provide income and asset information IIRC).
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where the **** do you get off thinking you are entitled to need-based aid? you have 300k in the bank and you think you deserve need-based aid? you must be out of your goddamn mind.
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There's some double-strength trolling starting to happen in here. Although I wouldn't mind getting my hands on that English-to-English-as-spoken-by-Mandarin-native-speaker translator app that's bringing all the boys to the yard and keeping this thing floating.
Also, in before "What is troll?" response from OP.
Also, in before "What is troll?" response from OP.
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I don't know....saving up 300K cash for a house is pretty much a classic immigrant thing to do due to distrust of the financing system or lack of knowledge. Also the fact that the OP doesn't understand the concept of a down payment seems to confirm that.
In regards to the transfer of money to your parents, that would be a stupid thing to do in the first place because it will be subject to a gift tax. You'll also have to report that money to the IRS when you move it over to your parent's account because it's such a large amount of money, so you can be sure they'll know about it.
In regards to the transfer of money to your parents, that would be a stupid thing to do in the first place because it will be subject to a gift tax. You'll also have to report that money to the IRS when you move it over to your parent's account because it's such a large amount of money, so you can be sure they'll know about it.
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