Accepting Financial Aid Award

[yrs240]

Im an incoming M1 at a large school and am trying to decide how much of my award to accept. Do most students have parents pay part of the costs incurred, like for instance, living expenses, and then just take the rest (costs to the school) in loans? Or is it it advantageous to just accept everything that was offerred and not have to pay anything out of your pocket for the year? Most of my award is a federal unsubsidized, meaning it will accrue interest. This is the part of the award I will have to decide how much of to accept. The other awards do not accrue interest, so I'll most definitely accept them.

Thanks for your help!

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[Mr hawkings]

Im an incoming M1 at a large school and am trying to decide how much of my award to accept. Do most students have parents pay part of the costs incurred, like for instance, living expenses, and then just take the rest (costs to the school) in loans? Or is it it advantageous to just accept everything that was offerred and not have to pay anything out of your pocket for the year? Most of my award is a federal unsubsidized, meaning it will accrue interest. This is the part of the award I will have to decide how much of to accept. The other awards do not accrue interest, so I'll most definitely accept them.

Thanks for your help!

The question is how sure are you that your parents are willing or able to cover the costs of what you do not accept in loans. It would suck to find out halfway through forst year that you dont have enough money to cover everything.

In today's economy the answer to that question might not be what it was a year ago.

By the way, interest does not need to accrue that much. You can make payments while in school if you are so inclined to reduce the overall amount

 

[yrs240]

By the way, interest does not need to accrue that much. You can make payments while in school if you are so inclined to reduce the overall amount

Hey thanks!

So just to clarify, are you saying that loans can be repayed during the year they were taken out with principal payment only and no interest?

Thanks

 

[silas2642]

Im an incoming M1 at a large school and am trying to decide how much of my award to accept. Do most students have parents pay part of the costs incurred, like for instance, living expenses, and then just take the rest (costs to the school) in loans? Or is it it advantageous to just accept everything that was offerred and not have to pay anything out of your pocket for the year? Most of my award is a federal unsubsidized, meaning it will accrue interest. This is the part of the award I will have to decide how much of to accept. The other awards do not accrue interest, so I'll most definitely accept them.

Thanks for your help!

Check with your school and ask. Generally it is better to only take what you need because I believe the interest starts accruing right away. If your parents will pitch in and help, that's great. Write a budget and stick with it. You can definitely pay back your loans at any time, and this is definitely wise.

At my school, you are entitled to the money that was in your loan package, so even if you did not take out all the loan money but find out during the year that you need more, you can take out more loans later on.

 

[235009]

if you have the money on hand (either your own money or your parent's) it is always better to spend it first. the nuances behind how much you can take out in loans and when can only be answered by your school's financial aid office. however i'm quite sure that they don't hand you a $40,000 check at the beginning of the school year...the money is usually given directly to your institution, they take out your tuition etc from it and then you get a check for the remainder each semester...and then you can typically adjust how much loan money you take second semester depending on how much you have left over. this is usually a very flexible process.

 

[Mr hawkings]

Hey thanks!

So just to clarify, are you saying that loans can be repayed during the year they were taken out with principal payment only and no interest?

Thanks

I think it depends on the terms of the loan you get. Some will have a pre-payment penalty of some sort (so make sure you understand what the terms of your loan are before you start paying).

Either way, if you pay the interest alone while in school, the overall interest you acrue over the 4 years of med school on top of the principal is significantly lower so your overall debt is lower.

Also, like someone above said the school takes out what you owe in tuition and fees and refunds the balance to you to take care of living expenses, books etc. If you dont borrow enough and your parents fall through, You can alway come back and borrow more as long as you are still under the estimated cost of attendance that the school has set.

 

[bydotte]

unsubsidized means the loan starts accruing interest right away (subsidized loans start later), but the interest rate is lower than your credit card rate or maybe even your car loan, so it depends on whether you can put that $ to good use or not.

 

[Forthegood]

Your school will have a person in the office in charge of financial aid. Talk to them (in person). They are best fit to answer your specific questions. These are important decisions... do not just poll the audience!