Credit and loan resources for prospective med students and residents

[deleted367183]

As I was pulling my credit reports this afternoon, I noticed that in honor of the pandemic, the three big reporting agencies are doing free reports once a week instead of once a year like they usually do. See Annual Credit Report.com - Home Page The agencies have lots of random gateways that may involve paying a fee or signing up for some non-free service, so double-check to make sure you're getting the free offer. You shouldn't need to put in credit card info to get your reports.

The most pressing reason to straighten out your credit before med school is so that you can qualify for a Grad Plus loan. This is the federal loan that has a credit check. Direct Loans, a.k.a. Stafford loans, do not, but they have a yearly and lifetime maximum that you can borrow. Here is the page that explains, in a strange, hard to read popup, exactly what "adverse credit history" means for a Grad Plus borrower. Control-F to search for "adverse" and actually click on the words. https://studentaid.gov/understand-aid/types/loans/plus If you have an adverse credit history, you will need a cosigner ("endorser"), so start thinking about this now.

To get started with your credit, check out the oldschool but highly informative forum Credit Boards. Literally start with the beginners' forum--there are some subtleties that are easy to miss that can affect exactly how your credit accounts are reported.

Once you're in med school and have a billion dollars in Federal loans, see this interesting article on the White Coat Investor that talks about how to start repayment 6 months early, with a $0 payment due, and thereby save many thousands of dollars. I followed his steps and it worked for me.

TISLA is an agency that provides free student loan advice for the asking. Its president, Betsy Mayotte, is active on reddit studentloans, if that's not damning with faint praise. Seriously, though, check them out.

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[medaspire1]

great resources @samc ( as always!!! )

 

[deleted367183]

great resources @samc ( as always!!! )

Thank you! Here's a P.S.. I was kind of reluctant to include it in the main post because it's strictly an FYI based on my own experience.

When I consolidated my loans in the spring of my fourth year of med school, as per the instructions in the White Coat Investor piece noted above, my Grad Plus loans were paid off and rolled into a new Direct Consolidation Loan (this is the definition of consolidation). My Grad Plus endorser then received a paid in full letter and was off the hook. There's no credit check for a Direct Consolidation Loan. So when you're looking for an endorser, keep in mind that they MAY only be responsible for your loans during the time you're in med school, before repayment even begins. But your mileage may vary; proceed with caution. A Grad Plus loan is a Federal debt and they can garnish an endorser's Social Security, taxes, etc.

Although Grad Plus eligibility is not based on a credit score--only on the presence of adverse credit history as noted above--you may want to start rebuilding your credit while you're in med school in anticipation of better times ahead. I was able to do this with a secured credit card that converted to unsecured after about two years of on-time payments. I won't recommend a particular company, but most of the major credit card companies have a secured offering.

 

[deleted367183]

One more resource: the AAMC's MedLoans Organizer and Calculator. This calculates repayment while taking all the vagaries of medical training into account--residency income, fellowships if any, all that good stuff. Ignore the "purchase access"--it's free for med students and med school graduates.