Convincing school (MWU) to increase COA budget

[2th Doc]

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So I'm in a bit of a quandry here. I'm heading to MWU-AZ this Fall and have been working on a hypothetical budget. It's looking like with a family of four, we'll likely need just a little more $ than the COA allows. Has anyone had any luck getting the school to modify the budget to allow more funds? If the school can't/won't increase the budget, what other options do I have? I've heard of non-certified (only 1 through Wells Fargo so far) loans that don't report to the school and therefore aren't limited by the COA budget, but they're extremely difficult to get even with a cosigner. With my less-than-excellent credit, I don't think this would be an option. Has anyone found any other workarounds for this?

 

[Oracle DMD]

I believe that the school will increase your max loan a bit, but they will also try to convince you to live smaller and make your school loans work. The cost of living here in AZ is pretty reasonable, and the max loan will give you about $7500-$8000 every three months. There are also work study programs here that will also help you. You can work at the gym or library or even for the clinic making phone calls to patients for recalls. Have no fear, there is a way to afford school, and you are not the only student with a family.

 

[mike3kgt]

So I'm in a bit of a quandry here. I'm heading to MWU-AZ this Fall and have been working on a hypothetical budget. It's looking like with a family of four, we'll likely need just a little more $ than the COA allows. Has anyone had any luck getting the school to modify the budget to allow more funds? If the school can't/won't increase the budget, what other options do I have? I've heard of non-certified (only 1 through Wells Fargo so far) loans that don't report to the school and therefore aren't limited by the COA budget, but they're extremely difficult to get even with a cosigner. With my less-than-excellent credit, I don't think this would be an option. Has anyone found any other workarounds for this?

So $100k for 4 years isn't enough to pay tuition and live... You're going to take out $400k in loans to get a piece of paper for your wall?

At some point, this madness needs to stop.

I also hate to stymie someone's dream but at what point do you tell yourself, you know, maybe I shouldn't do this? Family of four? No loan forgiveness / rural work program? No military route? So you'll have $400k in loans before you even start working....

It's going to be a real tough road.

 

[2th Doc]

and you are not the only student with a family.

Indeed, this is something that gives me hope. I'm just trying to figure out what options there are that these families are using to get by, if the standard budget is not adequate. That's good to know about those work study programs, I'll definitely have to look into them when I get there. Thanks for the tips.

 

[2th Doc]

So $100k for 4 years isn't enough to pay tuition and live... You're going to take out $400k in loans to get a piece of paper for your wall?

At some point, this madness needs to stop.

I also hate to stymie someone's dream but at what point do you tell yourself, you know, maybe I shouldn't do this? Family of four? No loan forgiveness / rural work program? No military route? So you'll have $400k in loans before you even start working....

It's going to be a real tough road.

Shoot, $400k ($500k if I can get the school to up my budget) aint no thang... I'll have that paid off in 2 years tops . Don't you worry about me.



In all seriousness though, relax. You're obviously passionate about saving money, and coincidentally, so am I . I am an Army HPSP recipient. However, as far as I've found out, that doesn't have any impact on the total amount of money for living expenses that I'll be able to receive (the stipend is subtracted out of the COA budget and I can receive the difference in loans). So, considering it's a moot point, I didn't mention it. But, since you tried to stymie my dream, I figured I'd que you in.

 

[Sublimazing]

Shoot, $400k ($500k if I can get the school to up my budget) aint no thang... I'll have that paid off in 2 years tops . Don't you worry about me.



In all seriousness though, relax. You're obviously passionate about saving money, and coincidentally, so am I . I am an Army HPSP recipient. However, as far as I've found out, that doesn't have any impact on the total amount of money for living expenses that I'll be able to receive (the stipend is subtracted out of the COA budget and I can receive the difference in loans). So, considering it's a moot point, I didn't mention it. But, since you tried to stymie my dream, I figured I'd que you in.

Heh, his jump to judge you as fiscally crazy may have been a tad premature...but in Mike's defense most people who go into dentistry, and especially those on this board, do so with the hopes of great riches...so to hear someone willing to take the modest compensation of the armed forces route is often unexpected.

I would be surprised if a school would give you an extra 25k a year though...that seems shockingly high

 

[2th Doc]

I would be surprised if a school would give you an extra 25k a year though...that seems shockingly high

That whole $500k thing was just a joke, if that's what you mean by extra 25k/year. At most, I'm talking an extra $500/mo, $6k/yr.

 

[mike3kgt]

Shoot, $400k ($500k if I can get the school to up my budget) aint no thang... I'll have that paid off in 2 years tops . Don't you worry about me.



In all seriousness though, relax. You're obviously passionate about saving money, and coincidentally, so am I . I am an Army HPSP recipient. However, as far as I've found out, that doesn't have any impact on the total amount of money for living expenses that I'll be able to receive (the stipend is subtracted out of the COA budget and I can receive the difference in loans). So, considering it's a moot point, I didn't mention it. But, since you tried to stymie my dream, I figured I'd que you in.

I've never been one to try to turn somebody away from dentistry but the harsh reality is that school admins ignore the life implications of student loan debt and we are seemingly on the edge of a bubble similar to that of the mortgage-loan/default-swap debt crisis. Most of the newer dental schools (and many of the older private ones) have very high tuition and are very effective in dangling the "dream" carrot in front of pre-dent's faces. I've always been one to advocate doing their best to get into the lowest cost dental school out there and keeping your costs as low as possible.

Well, what do I know right? I've only graduated top in my class, practiced general for 3 years in 3 widely different types of practices, went back to school to attend a competitive residency (where I don't have to pay), and have little student loan debt. My wife has been practicing for 5 years, has high student loan debt and works on/off in corporate dentistry. I know firsthand the challenges of corporate dentistry, the pressure of high student loan and what an "extra $500/mo, $6k/yr" can do to a fresh grad and the pressure that results.

Going military is absolutely a great option, especially in today's debt climate. After your commitment, it may be possible to walk away with no debt and start living the good life right away. I know the recruiters start sounding really really good when $200k+ cash bonuses to enroll start popping up.

Good luck.

---------------------------------------------

Student loan debt is a serious problem and is on the verge of crisis. You may not realize it now but you will when you have to start paying $3,259.63 every month after taxes the day after you graduate (depending on when you take out your loans).

http://www.finaid.org/calculators/scripts/loanpayments.cgi
Loan Calculator

Loan Balance: $500,000.00
Adjusted Loan Balance: $500,000.00
Loan Interest Rate: 6.80%
Loan Fees: 0.00%
Loan Term: 30 years
Minimum Payment: $50.00

Monthly Loan Payment: $3,259.63
Number of Payments: 360

Cumulative Payments: $1,173,462.04
Total Interest Paid: $673,462.04

 

[Oracle DMD]

My total debt after taking the max loans is just south of 400k. With Income Based Repayment, my 1st year payments will be about $990 (after my 6 month grace period), and will never increase to the standard 10 year repayment level of about $4,400 unless I am "making it rain" so to speak. After 25 years the rest of the loan is written off and I will be able to save enough money to buy a practice in a few years. In the mean time, cash flow will be healthy and I can focus on my skill set and integrating into my associateship.

Don't fear debt, manage it, have a plan, execute.

 

[gryffindor]

My total debt after taking the max loans is just south of 400k. With Income Based Repayment, my 1st year payments will be about $990 (after my 6 month grace period), and will never increase to the standard 10 year repayment level of about $4,400 unless I am "making it rain" so to speak. After 25 years the rest of the loan is written off and I will be able to save enough money to buy a practice in a few years. In the mean time, cash flow will be healthy and I can focus on my skill set and integrating into my associateship.

Don't fear debt, manage it, have a plan, execute.

So for a $400K loan, you will be paying $990 a year for 25 years?

Sorry, I don't know much about the Income Based Repayment. I graduated in an era of consolidating loans to <3% interest. A few years later, graduates couldn't get interest lower than like 7%. A few years after that, this income based repayment scheme comes along. What is stopping the next crop of politicians from taking it away from those "rich doctors and dentists"? Seems like student loan terms change every time things switch around in Washington.

 

[NOLAdentist2016]

So you are bringing your wife and two kids to dental school with you? And you need an extra $500 or so a month? Maybe your wife could get at least part-time job rather than you having to take out loans money to live? Just a thought.

 

[Oracle DMD]

So for a $400K loan, you will be paying $990 a year for 25 years?

Sorry, I don't know much about the Income Based Repayment. I graduated in an era of consolidating loans to <3% interest. A few years later, graduates couldn't get interest lower than like 7%. A few years after that, this income based repayment scheme comes along. What is stopping the next crop of politicians from taking it away from those "rich doctors and dentists"? Seems like student loan terms change every time things switch around in Washington.

No, your payment is based on a formula that is supposed to determine what you can afford. You apply for it every year, and it adjusts the monthly student loan payment for the entire year. Check it out and play with the numbers.

http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRCalc.jsp

After 25 years, any loan amount due is forgiven (although I'm sure the amount forgiven counts as income that year). The monthly payment never goes higher than the 10 year repayment schedule. When I play with the numbers here, I come out owing between $990 and $1600/mo depending on how much our (my wife and I) adjusted gross income will be.

 

[A6project]

My total debt after taking the max loans is just south of 400k. With Income Based Repayment, my 1st year payments will be about $990 (after my 6 month grace period), and will never increase to the standard 10 year repayment level of about $4,400 unless I am "making it rain" so to speak. After 25 years the rest of the loan is written off and I will be able to save enough money to buy a practice in a few years. In the mean time, cash flow will be healthy and I can focus on my skill set and integrating into my associateship.
Don't fear debt, manage it, have a plan, execute.

some of pre-dents and I talked about this numerous times. you have wrong info.
now its 20 yrs (no more 25 yr). But in 21st yr, your remaining balance becomes taxable income. With MWU tutition, you know how much the loan will be?? around 1 million. since your payment will never be more than interests so ur debt will snowball.

On Year 21, federal taxes and your state taxes from your income + 1 million will be at least 300-400k. (I know this because I played around numbers like 20 times)

I thought about doing IBR as well but some of pre-dents raised good points.
1. What if Govt changes policies (unlikely) but def feasible considering the current fiscal situation. Loan forgiveness is not even guaranteed on your MPN. It is just a program.
2. Have you thought about how your students loans (which cannot be forgiven by current bankruptcy laws) will affect your ability to borrow for a house, cars, acquiring a practice, etc?

But you never know, you might make smart investment plans and work the system.

 

[Oracle DMD]

some of pre-dents and I talked about this numerous times. you have wrong info.
now its 20 yrs (no more 25 yr). But in 21st yr, your remaining balance becomes taxable income. With MWU tutition, you know how much the loan will be?? around 1 million. since your payment will never be more than interests so ur debt will snowball.

On Year 21, federal taxes and your state taxes from your income + 1 million will be at least 300-400k. (I know this because I played around numbers like 20 times)

I thought about doing IBR as well but some of pre-dents raised good points.
1. What if Govt changes policies (unlikely) but def feasible considering the current fiscal situation. Loan forgiveness is not even guaranteed on your MPN. It is just a program.
2. Have you thought about how your students loans (which cannot be forgiven by current bankruptcy laws) will affect your ability to borrow for a house, cars, acquiring a practice, etc?

But you never know, you might make smart investment plans and work the system.

It is 25 years according to the website.

http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRPlan.jsp

With banks now requiring 40% down for practice purchases in many cases, I figured being cash strong is vastly more important (and easier to get) than being debt free. When you are cash strong, more options are available to you because you are asking less of lenders, you become much less of a risk, and maybe you don't need banks at all for loans. More and more dentists are becoming banks themselves and seller financing their practice so they collect interest and collateralize the loan with accounts receivable and/or stocks of the business or hard assets.

IBR is a program. Correct. But what we're really talking about is how new grads will afford a student loan payment. This is my plan. This is my decision. I hope this helps others make their decision.

 

[Oracle DMD]

Here is a good FAQ type of document from the website.

 

[GTFOOMICT]

some of pre-dents and I talked about this numerous times. you have wrong info.
now its 20 yrs (no more 25 yr). But in 21st yr, your remaining balance becomes taxable income. With MWU tutition, you know how much the loan will be?? around 1 million. since your payment will never be more than interests so ur debt will snowball.

On Year 21, federal taxes and your state taxes from your income + 1 million will be at least 300-400k. (I know this because I played around numbers like 20 times)

I thought about doing IBR as well but some of pre-dents raised good points.
1. What if Govt changes policies (unlikely) but def feasible considering the current fiscal situation. Loan forgiveness is not even guaranteed on your MPN. It is just a program.
2. Have you thought about how your students loans (which cannot be forgiven by current bankruptcy laws) will affect your ability to borrow for a house, cars, acquiring a practice, etc?

But you never know, you might make smart investment plans and work the system.

It is 25 years according to the website.

http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRPlan.jsp

With banks now requiring 40% down for practice purchases in many cases, I figured being cash strong is vastly more important (and easier to get) than being debt free. When you are cash strong, more options are available to you because you are asking less of lenders, you become much less of a risk, and maybe you don't need banks at all for loans. More and more dentists are becoming banks themselves and seller financing their practice so they collect interest and collateralize the loan with accounts receivable and/or stocks of the business or hard assets.

IBR is a program. Correct. But what we're really talking about is how new grads will afford a student loan payment. This is my plan. This is my decision. I hope this helps others make their decision.

You both bring up important points. A6 mentions something that is not brought up enough. It takes a lot of excel work to show that point though. I have tried many times to create a universal excel sheet that proves these points but it is very difficult. I can make one that applies to me but it's too hard for others to plug and play.

IBR is in the process or has been reduced to 20 years. Have to also remember the 10 year option for 'public service'. Residency time counts! If you're hospital based or non-profit based. Tack on some more years in 30 hrs/week of public service and the debt is gone at the start of the 11th year. With the public service option, the forgiveness is not taxed. The 20 or 25 year one is taxed. The deal is, you will hopefully not qualify for IBR because your income has risen to a point where you are no longer eligible.

I actually hate IBR because it passes commitments from an individual onto the general public. O well. I do think the IBR will help recruit young faculty to dental schools though. 4 days a week at the d school and 1 day a week in private practice is possible. Just gotta watch the AGI. Might need some dirty tax tricks.

Just my opinion. No facts presented.

 

[Sublimazing]

Here is a good FAQ type of document from the website.

If I do IBR on resident's salary then the government covers the interest on my subsidized loan for 3 years? Can someone confirm that I understood that correctly?

That comes to thousands for me if that's true

 

[A6project]

Yes that's true. Up to 3 yr, govt pays your interests which is freaking sweeeet! U don't have to be a resident. After u submit your income stuffs, its 3 yr from that point on.
I deleted all my saved bookmarks, but i think that it's from IBRinfo.org or something like that