Can I Pay for Med School and Survive?

[dst10spr97]

I am currently a financial analyst, contemplating going to med school. I will be starting my post bacc in the Spring. I had to pay for undergrad through mostly loans, and grad school through a combination of loans and a little kick in from my employer. Needless to say I have $60+ in principal from student loans already, via unsub/sub federal loans.

I will spend the next couple of years before applying, taking classes, working full time and paying off as much debt as possible. I estimate my living expenses (around the time I want to start med school) to be about $20k-25k per year. At this time I am single with no dependents.

I thought I had read somewhere that the student loan cap was $138k, which means if that's the case I have about $68k more in loans to be able to receive, if needed. Which definitely won't cover 4 years of med school tuition, fees, and living expenses. In addition I hear there isnt much out there for URM. In addition to that, my credit isn't that perfect due to a stint of unemployment. Anyone have any input on other options available to cover my expenses and tuition.

I am so scared I will get in and won't be able to pay for it. I am willing to live off Ramen Noodles if I have to.

Thanks
DST

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[paean]

A couple of things to consider.

1. Depending on where you live, student living expense budgets range from 10-20K per year, so you will be expected to bring your expenses down while in medical school. Rather than living on ramen while in medical school, is there any way you can bring your current expenses down so you will be able to save a little more towards school? Being a student can be really frustrating if you are used to having an income, but if you sit down and look at all of your expenses now, you may find things that you are willing to reduce that can make a big cumulative impact. Some common things are:

bring your lunch (save about 2000 per year), and if you include making coffee rather than buying a latte and pastery, you can save another 1000;

cut back on cable, do you really watch all those premium channels anyway? or give it up entirely and get netflix.com for $20 a month;

drive an older car as long as the maintance isn't costing you as much as buying a new(er) inexpensive car, older cars also cost less to insure;

pay less in rent, if you can move to a less expensive apartment or house, get a roommate or two;

eat dinner at home (avoid going out for meals);

go to the library rather than buying books;

get cheap haircuts, most the time you can find a good haircutter for under 15 if you are willing to subject yourself to a few bad cuts as you shop around, and when you do, get their name and keep going back to them, or cut your hair at home (works well for long and very short hair);

go on less expensive vacations, and for less expensive entertainment;

stop buying clothes, most of us have far more than we actually need to go 2 weeks without doing laundry, and while not buying more won't allow you to always wear the newest fashion, it can make a big difference in savings, same goes for cosmetics and personal care products.

These are ideas that can be taken to the extreme, or used to somewhat reduce expenses. You said that you're a financial planner, so you should be able to take the same discipline that you use to analyse other people's records and look at your spending habits. Then make a budget with a little wiggle room and an emergency fund, and stick everything you can in savings.

2. Definately pay off as much debt before entering with 2 exceptions: student loans that can be deferred during medical school, and possibly your mortgage if you own a house. As you noted, there is a lifetime cap to Stafford loans, so rather than work to pay them off, you might be better to pay the minimum and set aside all the money you would use to pay them off at an accelorated rate as saving for medical school living expenses. If you have not yet consolidated, now is the time to do it. You will get the current low interest rate for the life of the loan, and can reduce your current payment by extending your repayment time (more money for savings).

3. In terms of your less than perfect credit - did you default on payments? were you significantly late? did you declare bankruptcy? if the answer to these is no, you were just late on a few payments, you will probably be able to get private loans to bridge the gap between federal loans and your savings, albet at higher interest rates than students with good credit. You may also be required to have a cosigner with good credit. If you want to post specifics about your credit problems, you could get more specific answers. As you said, you have a few years, so work now to repair your credit record. If you are not sure how to do that, there are lots of websites with info, or get a book from the library.

 

[mpp]

paean gives some good advice. Cut back on your expenses now. Depending on where you live you could easily have a budget of less than half of what your quoting. It is easy to live on $1000 per month if you only consume the bare necessities (and with no dependents of course). The difficult things are transportation and health insurance. But rent, food, and the rest can be had for less than $1000 per month depending on the cost of living where you live. Then just live nearby school and ditch the car entirely. Cars can be horrible money pits.

Some additional suggestions to ease the budget would be to apply to schools where the cost of living is low: that is stay away from New York City, Los Angeles, San Francisco, Chicago, etc. You'll find housing and other expenses much lower outside of the big cities. Also, apply to schools that are less expensive and have a history of being generous to URM's in terms of financial aid. Some schools will give all URM's they accept a full ride

One caveat on the loan consolidation. Be sure that your loan will still be eligible for a hardship deferrment. Often times loans in consolidation are not eligible for payback deferment and you will be stuck paying back the loan even while in school full time without income. Read the fine print carefully.

 

[dst10spr97]

I agree that was some good advice. A lot of which I was aware of or does not apply to me. Where can I gather some information on which schools are more generous to URM (I happen to be an African American woman)? It's funny cause initially I had considered getting a phd in accounting and going into university teaching, which they are currently giving away money to URMs. I could have easily pulled in $35-40k, with a tuition waiver. However I want to follow my heart and not just the money. Back to the subject at hand...

As far as my credit is concerned. Some late payments, which on limited income during unemployment a few things had been sent to collections. No bankruptcy. As a matter of fact I will be putting statements on my credit reports that the negative marks are due to unemployment. No chronic late payments due to just not paying or anything.

Like I said I am going to cut as much as I can. That's kinda why I want to go to school back in Michigan, cause I can live with relatives, or friends if I have to. Actually Wayne State, U of M, and Michigan State are all about an hour or less from my childhood home where my parents still live.

As far as other things, I don't pay to get my hair done (good connections) I long gave up clothes and shoes (ouch) to start paying off some things, I stay away from Starbucks, I am a great cook. The only thing that is going to get me is I do have a fairly brand new car, 2001, that may or may not be paid off, depending on when I start.

We will see what happens though..

 

[mpp]

I think a lot of the private schools would be generous to an African American woman, but the Michigan state schools could probably offer something up as well, and there ain't no cheaper living than living with the 'rents (if you and they can stand it, that is).

I wouldn't worry about the credit thing unless for some reason you will definitely have to go to private loans. As you get closer to applying, I would get in touch with the financial aid offices at the schools at which you are interested in attending to be sure they understand that you will already coming into medical schools with $XXX in outstanding federal loans.

Good luck...

 

[paean]

A friend of mine who was an outstanding applicant in many ways, and also a black woman, was offered a full ride at Wisconsin, living expenses and all. She was told that if you fall under their minority recruiting radar (they have a special recruiting interview schedule) you are promised at least a half-ride.

I don't know that the scholarship offers at other schools (she received several) were due to or increased because she was black, but because of her experience, I learned that many schools that DO NOT give merit scholarships for MD students actually will if they want you badly enough. The only school that held out and went strictly on need was Harvard.

Before anyone (I won't name screen names) jumps on this as an example of unfair race issues, if my friend had been white, I'm confident that she would also have been accepted to every school she applied to, and been turning down scholarship offers left and right. She was a truely phenomenal applicant.

DST, I rarely disagree with mpp about anything financial, s/he gives great advice. But I know that having a car is critical in your third and fourth year of medical school almost everywhere, because you have to be at the hospital before transit starts running, and often leave late at night. That is okay if you go to a school with only one hospital (Yale comes to mind, but I may be wrong) but most schools have several spread out around their city, and so living right next to all of them becomes impossible. However, if you have an expensive car (cost over 15K new) then you won't be able to get enough money from financial aid to pay insurance, and federal law precludes them from increasing student budgets to include car payments. So if you bought a great 25K car, you may need to consider selling it and getting a less expensive one.

May I recommend the base model Honda Civic (not the fancy EX or LX or even DX, but the hatchback CX that the dealer won't even tell you exists unless you ask specifically) it is supposed to cost the least in maintance and hold its value longest of any car sold last year (of course I don't know if they still make it, last time I was in a dealership was 2001). Of course, if you want power steering, you will have to go up a model to the DX.

But seriously, good luck with everything. Your credit record sounds like it won't be an insurmountable barrier, and you are already planning to do the right thing about sending in an explaination.

Sorry if I tend to over explain, much of the time people already know many of the the suggestions I posted, but sometimes someone hasn't and I'd hate for them to not have as many options as possible.

 

[dst10spr97]

Congrats Paean on getting into your top choice! I hope that can be me saying that one day!

 

[mcwmark]

dst-

I too was a financial analyst for two years before deciding that medical school and not business/law school were for me--great choice.

While I do want to stay politically correct, it is easier for an URM to get scholarships, and there are plenty of them out there.

Also, you will be able to borrow as much as you need (albeit if you've got semi-good credit...i.e. no bankrupcy or loans currently in default). Some students at my school end up with over 200,000 in debt (undergrad and med school combined) so you'll at least be able to afford a soda with that ramen

That cap you may have heard about may be the Stafford loans (I'm not sure, but I think so) and that are the loans that originate from the federal govt--but believe me, there are plenty of banks out there that want to lend money to future physicians. So in the meanwhile, save what you can, pay off as much debt as you can, but more importantly, do well in your post-bac classes and study hard for your MCAT so when that day comes, you'll be able to choose where you want to go to school.

Good luck!

 

[georgia_md]

some really good info in this thread

 

[OSUdoc08]

I am currently a financial analyst, contemplating going to med school. I will be starting my post bacc in the Spring. I had to pay for undergrad through mostly loans, and grad school through a combination of loans and a little kick in from my employer. Needless to say I have $60+ in principal from student loans already, via unsub/sub federal loans.

I will spend the next couple of years before applying, taking classes, working full time and paying off as much debt as possible. I estimate my living expenses (around the time I want to start med school) to be about $20k-25k per year. At this time I am single with no dependents.

I thought I had read somewhere that the student loan cap was $138k, which means if that's the case I have about $68k more in loans to be able to receive, if needed. Which definitely won't cover 4 years of med school tuition, fees, and living expenses. In addition I hear there isnt much out there for URM. In addition to that, my credit isn't that perfect due to a stint of unemployment. Anyone have any input on other options available to cover my expenses and tuition.

I am so scared I will get in and won't be able to pay for it. I am willing to live off Ramen Noodles if I have to.

Thanks
DST

There is a Stafford loan cap at around $189,000

This does not include Perkins, PLUS, other governmental loans, or private loans.

 

[sugirl]

I am currently a financial analyst, contemplating going to med school. I will be starting my post bacc in the Spring. I had to pay for undergrad through mostly loans, and grad school through a combination of loans and a little kick in from my employer. Needless to say I have $60+ in principal from student loans already, via unsub/sub federal loans.

I will spend the next couple of years before applying, taking classes, working full time and paying off as much debt as possible. I estimate my living expenses (around the time I want to start med school) to be about $20k-25k per year. At this time I am single with no dependents.

I thought I had read somewhere that the student loan cap was $138k, which means if that's the case I have about $68k more in loans to be able to receive, if needed. Which definitely won't cover 4 years of med school tuition, fees, and living expenses. In addition I hear there isnt much out there for URM. In addition to that, my credit isn't that perfect due to a stint of unemployment. Anyone have any input on other options available to cover my expenses and tuition.

I am so scared I will get in and won't be able to pay for it. I am willing to live off Ramen Noodles if I have to.

Thanks
DST

I too am in the same boat as you. I have a professional job paying almost twice what school will be per year, and am going to give that up to be bringing in nothing. My advice to you would be to align yourself in a financial situation so you can still make money in school. I have bought enough property to pay for my mortgage at school by renting the rest out. I have saved enough money to have 1250 living for the next two years. I figure after the first year if you do well you should be able to apply for a lot of scholorships. Right now I see all the scholorships want a GPA and you wont have that until after the first year. It is possible, trust me I am scared to death but I think the overall payoff will be very good. You have an upper hand if you have a full time job and are stacking money, your standard of living wont go down that much if you plan right.

 

[georgia_md]

I too am in the same boat as you. I have a professional job paying almost twice what school will be per year, and am going to give that up to be bringing in nothing. My advice to you would be to align yourself in a financial situation so you can still make money in school. I have bought enough property to pay for my mortgage at school by renting the rest out. I have saved enough money to have 1250 living for the next two years. I figure after the first year if you do well you should be able to apply for a lot of scholorships. Right now I see all the scholorships want a GPA and you wont have that until after the first year. It is possible, trust me I am scared to death but I think the overall payoff will be very good. You have an upper hand if you have a full time job and are stacking money, your standard of living wont go down that much if you plan right.

1250 living? Sorry, I was not sure what you meant by this, you mean to live on $1250 a month?