debt management and financial planning

[Tony.]

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can anyone tell me what classes they took or are planning to take to manage their debt after optometry school.
what books would you recommend reading, what books have you read about this topic.
is there a website out that that make me less when i get my final bill after the 4 years.....

 

[TPMOH]

The debt's going to suck bad matter what books you read on how to manage it. Especially if you're young (mid to late 20's when you graduate), I would suggest consolidating all of your student loans and spreading out the payment over 30 years. This will allow you to have a lower payment when you get out of school and allows you the flexibility to pay more whenever you can so they will be paid off earlier. Good luck to all of us as far as the loans go- it's the one disheartening thing about getting the OD.

 

[Tony.]

The debt's going to suck bad matter what books you read on how to manage it. Especially if you're young (mid to late 20's when you graduate), I would suggest consolidating all of your student loans and spreading out the payment over 30 years. This will allow you to have a lower payment when you get out of school and allows you the flexibility to pay more whenever you can so they will be paid off earlier. Good luck to all of us as far as the loans go- it's the one disheartening thing about getting the OD.

can you explain really briefly what 'consolidating' means.
and.....wow! I cant imagine paying back all that money in 30 years time,
wouldnt it make more sense to just pay everything back asap?
i.e : work my butt off as an OD, make tons of $, eat Ramen Noodles and live with my parents? I think the sooner i pay back the $, they quicker I can make my own $, am i on the right track here?

 

[idoc2006]

tony,
as of today, the current interest rate for student loans is 2.77%, decided by the government once a year in roughly july. the way consolidation is set up now, it is possible to bunch all your loans together from optometry school and also undergrad and lock them in at the current interest rate.

With interest rates this low, many tell us it is wiser for to pay off the minimum over 30 years and invest your money somewhere since even a poor investment will usually accure around 10% interest. Now there are bills going around trying to get this changed to a variable interest rate but these are still many years away.

Another point to consider is that interest rates are probably on their way up. The economy is starting to show improvements and after this years election, changes are likely to happen. As of last week, i believe an estimate had them up over 3%. So what will be the best thing in 4-5 years is anybody's guess.

Hope this helps out a bit. i'm am no way an expert on this stuff, this is just my observations from talking to the financial aid directors here at ico. If you do a search through the forums, there are many different posts related to debt and consolidation.

 

[TPMOH]

can you explain really briefly what 'consolidating' means.
and.....wow! I cant imagine paying back all that money in 30 years time,
wouldnt it make more sense to just pay everything back asap?
i.e : work my butt off as an OD, make tons of $, eat Ramen Noodles and live with my parents? I think the sooner i pay back the $, they quicker I can make my own $, am i on the right track here?

What I am basically saying is to consolidate and set up the payment over 30 years so the amount you HAVE to pay is at a minimum- but you can prepay without penalty whenever you want so it won't take you nearly that long if you don't want to. Thus, if your payment is on the 30 year plan, your monthly payment may be around 600-800 per month (or maybe more, depending on how much you borrow). The 10 year plan, however, with the same debt may be 2,000 per month. If you have a few lean months in your 1st year out of school, 2K/mo may be a little too much to handle. But, if things go real well, you could still pay 2K/mo with the 30 year plan and end up paying your loans off in 10 yrs anyway.