DO you have financial aid questions?

[mshheaddoc]

If you do, please post them here. I'm working on compiling links and articles about financial aid to hopefully increase traffic in this forum.

Please comment on any questions you want to know about. Some of the items that will be covered are:

• history of federal student loans - Why should taxpayers pay for YOU to go to school?
• how to apply for federal student loans - the mysterious FASFA
• What can I expect as a time line for getting my financial aid package together?
• What if federal staffords/perkins won't cover my cost of attendance (COA)? PLUS loans and private loans are an alternative, we'll explain how both work and why one might be better than another!
• How do I pick a lender? Is one deal better than another?
• I have $150,000 in loans and I'm about to graduate, HELP!

Any other questions you have .... fire away and we'll add them in!

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[Doctor Bagel]

The big one I seem to see is what if I have family members (spouse, children) to support. How does that affect my cost of attendance, and what happens if I need to borrow beyond the cost of attendance?

Getting specifically into the how to apply issue, should I include my parent's info? How does that affect my aid, etc.? Also, explaining how the EFC is calculated would be cool -- I know there's a pdf with an explanation at the fafsa site, but it makes people including me nervous.

Hmm, credit and its impact on getting loans.

And change the last one to what if I have $250k+ in loans.

Oh yeah, I also think it would be useful to have an explanation as to why average debt amounts given by groups like USNews aren't helpful because they include all sorts of people with different circumstances than you. If a school has a particularly wealthy student body, they'll wind up with a low debt amount, but that doesn't help you if you're poor.

Editing to add that information about when student loans are capitalized would be good. I'm pretty iffy on that one. Maybe add a capitalization for dummies discussion because we non-finance people aren't so good at that.

 

[Doctor Bagel]

And I know you're not going to do this, but please please don't insult us by filling up the suggestion information with trite information like don't live extravagantly and try to find scholarships instead of loans. We're here because we need specifics, not general info like loans need to be repaid and other basic junk like that. Unfortunately SDN's official writings on financial aid seem to go that way.

 

[mshheaddoc]

Hmmm, never did any SDN writings before and to answer at least the last question, my goal is to help the basic student who has NO idea about loans, understand why you have them, why you need them, and how to make them your friend I don't plan on patronizing tones. I'm hoping to actually work on a section strictly just for financial aid.

GREAT questions and please keep them coming.

 

[Vee]

i started a thread on this but haven't gotten any takers yet. how do i know how much to request in gradplus/cost of living loans?

 

[mshheaddoc]

Great question and that will be addressed in our series. But to answer your question, Grad Plus loans can only be for the difference in staffords and what your school COA (cost of attendance) is. So they help make up the shortfall.

So say you max staffords of $40,500 this year (they increased!) and your COA is $65000 with tuition and living expenses. You could get up to $24,500 in Grad Plus loans. You can't get OVER your COA with GradPlus loans (you do need a private loan for that). Does that make sense?

 

[MiesVanDerMom]

Great question and that will be addressed in our series. But to answer your question, Grad Plus loans can only be for the difference in staffords and what your school COA (cost of attendance) is. So they help make up the shortfall.

So say you max staffords of $40,500 this year (they increased!) and your COA is $65000 with tuition and living expenses. You could get up to $24,500 in Grad Plus loans. You can't get OVER your COA with GradPlus loans (you do need a private loan for that). Does that make sense?

So, how can we work on getting priavte loans beyond the COA? Which are the best private lenders?

 

[mshheaddoc]

So, how can we work on getting priavte loans beyond the COA? Which are the best private lenders?

Getting private loans will be credit driven. If your credit score does not meet their stipulations you might be able to borrow with a co-borrower. This is supposedly why schools will require a credit check for their prospective students to make sure they can afford their school.

As for the best lenders? Every lender offers different "incentives and benefits" for their users. The biggest differences with federal and private loans is that:

• federal loans can have automatic deferment and forbearance
• private loans have a higher interested rate and fees compared to federal loans, as well as they are usually variable interest rates

No matter what ANYONE tells you, no one can never tell you the "best" lender for you, just what their experience with a lender they might have chosen. Its really impossible to evaluate every single lender from a non-biased aspect and once someone does (and does it in detail) I will be the first to post it on here! So, since you have to do your homework in the meantime, what can I tell you that will actually help you?

Best thing you can think about is what do you want down the road. Try to find a lender that can help you with all your loan needs. They will be willing to work with you down the road. We ran into credit issues (not all credit reports are created equal!) and at first customer service was rude. Apparently, either a supervisor or someone higher up saw what was going on and called us back later PROFUSELY apologizing stating how they wanted to keep our business. Don't take "no" for an answer, ask to talk to supervisors and tell them you will leave their company if you feel you're being treated unjust. Having all your loans (federal and private) WILL give you leverage for negotiation. With the bigger lenders you might not think that's all that much, but if they want to keep your $200K in loans (which means ALOT MORE MONEY FOR THEM in the long run) they'll try to work with you.

Also I think students take for granted having all your loans under one roof. That means ONE payment. When it boils down to it you do NOT want to have to make 5 separate loan payments a month. Think about that in advance.

Finally, examine terms. Ask about residency/fellowship deferments. Our private loans have deferment already built into them, I know many other medical students that were not so lucky. Always ask your lender to clarify any terms. Ask them to dumb it down. Don't feel stupid, this is thousands of dollars YOU will have to pay back. MAKE SURE YOU UNDERSTAND IT!!!

One more thing, always talk to your financial aid office. I know many people complain about how their FA office sucks, but seriously, they do this for a living. If their secretary doesn't know, make an appointment with the director. Hopefully your school will be willing to help you make some of these tough decisions by giving you the information you need to make INFORMED decisions. Any office that tells you, GO WITH THIS LENDER, I'd heed my previous warning. If they tell you many of their students go with a particular lender, ask if they know why they went with that lender. Sometimes everyone jumps off a bridge, and its only because everyone else was doing it.

Just a brief overview but its food for though!

****Disclaimer: I am NOT a financial aid professional but have been dealing with federal and private loans personally for the past 10 years. My husband just graduated medical school and we went through trying to figure out consolidation, deferment, forbearance, etc. I spent hours (and I mean that LITERALLY) talking to his loan reps trying to figure out the system of how he should proceed with his loans. Some of them were great, others were horrible. But I'm here to share my general knowledge with the rest of you.

 

[mshheaddoc]

Information I found here:
http://sls.downstate.edu/financial_aid/loans/choosing_your_lender.html

Some Important Questions to Ask Your Lender

* CalculatorWhat benefits are offered? What percentage of students qualifies for benefits?
* How often is loan interest capitalized? If so, when?
* Is the customer service good? Call the lender and ask questions. What are the customer service hours? Can I access information over the internet? How long did I wait for my call to be answered?
* Is extra effort put forth to help students avoid default?
* Does the lender use a servicer?
* Does you lender sell their student loans to the secondary lender market?
* Are the origination fees discounted?
* Can the benefits offered change? How? When?
* What are the terms and conditions for hardship deferments?
* Are the benefits in writing? If so where can I find them?
* How long has the lender been in the student loan industry?
* How was the APR calculated?
* If I lose my benefits is there a "restoration of benefits" program?
* Use common sense when evaluating a potential student loan lender. If something sounds too good to be true, It usually is.

Qualifying For Borrower Benefits

It is important to realize that if you are late on a single monthly loan payment you will no longer qualify for the prompt payment discounts. Do not overestimate your ability to make all the payments on time. Ask the lender what percentage of their borrowers qualifies for each of the borrower benefit programs. Less than 15% of borrowers succeed in obtaining any discount other than the 0.25% interest rate reduction for Electronic Funds Transfer (EFT). (Even students who sign up for EFT occasionally miss a payment by having insufficient funds in their account. Students are, however, more likely to succeed in qualifying for the discounts if they sign up to use EFT to automatically debit their bank account for the monthly payments.) The actual success rate is probably closer to 10%.

Borrower Benefits Over Time

Wallet with cashA 2% interest rate reduction after 48 months of on-time payments may sound like a lot, but it is the equivalent of a less than 0.7% point reduction in the interest rate over the ten-year lifetime of a regular student loan. (Most of the other different interest rate discounts offered by various lenders yield a similar financial benefit, typically yielding an equivalent interest rate reduction that varies by less than 0.05% points from this figure.) Even after adding in the 0.25% point reduction for signing up for EFT, the savings is still less than a 1% point interest rate reduction. Since very few students qualify, the cost to the lender of offering student loan discounts is the equivalent of only about a 0.1% point reduction in the interest rate.

 

[daki]

Two questions...

What is the difference between deferment and forbearance, especially as it refers to private loans? I've just been told by my lender over the phone that only federal loans can be deferred, and private loans can only go into forbearance, whether it's in school or in residency?

Also wondering if anyone knows how to manage loans for dual degree programs, like dual MD/MPH? In my school I've found out that the cost of attendence for both degrees are different. And in taking a year off to get the MPH, I'll be considered a grad student, and will have to go by the financial aid constraints of the grad school, which allots a much lower allowance for living expenses than the med school (about $6000/yr). The fact that I'm dual degree, and would have to take up to 18 credit hrs per semester in the MPH program in order to complete it in a year doesn't seem to matter. The cost of attendance in the MPH program doesn't take into account those doing a dual degree, so I don't think I would even qualify for a GRAD plus loan. I'm beginning to think I made a mistake deciding to go for the dual degree

 

[okbye]

When you defer your federal loans it means the government is paying the interest on the subsidized portion of the loan and interest is acruing on the unsubsidized portion. Since private loans are not backed by the government and are not subsidized there is no deferral for them. In forbearance interest acrues on both the subsidized and unsubsidized portions. Basically you're gathering interest on the whole amount of the loan from the day it is disbursed whether you are in school or not, or making payments or not.

 

[mshheaddoc]

Well, many of us use deferment and forbearance interchangably (even myself sometimes). They are different terms and should be used accordingly.

Here is a definition from Direct Loan which is the government themselves:

Deferment
A postponement of payment on a loan that is allowed under certain conditions and during which interest does not accrue for subsidized loans.

Forbearance
A postponement of payment on a loan, typically if the borrower doesn't qualify for a deferment and is unable to make payments for a reason such as poor health. Interest continues to accrue during forbearance.

Main points were highlighted.

Deferment = terminology used for federal loans for the most part. Interest will not accrue on your subsidized Stafford or Perkins loans and will be capitalized (Capitalization- Adding unpaid interest to the loan principal. Capitalization increases the principal amount of the loan and its total cost.) at the end of your deferment periods. Usually if you have private loans your interest will still accrue no matter what so private loans are usually considered to be in forebearance.

Forbearance = you will have interest accruing even on subsizidized loans.

For Federal Stafford and Perkins loans you can request up to three year deferment (like with residency) then you can use up your three year forbearance. Always try to apply for deferment first and use that all up. Deferment can be applied for while you are in-school or grace period and must be "re-applied for" every year (for the max of three year deferment total) as it is only good for one 12 month period at a time.

Also, depending on your lender, during forbearance you might have to make interest only payments (at least I have heard of this happening on some private loans, not on federal loans). Private loans are very shady in some regard because they are not regulated by the government in the same way as federal funds so make sure you ask these types of questions to make sure you aren't stretching your finances thin during residency.

I did a detailed analysis of how one would qualify for economic hardship deferment in this thread in the gen residency forum.

 

[mshheaddoc]

Now for dual degree program, your financial aid office could work with you. I know some students that got provisional funding because they couldn't afford the second degree. Yes you have to be categorized as a grad student so you might have to get some additional private loans to make up any shortfall but talk to your program because it should go by credits not that you are "full time". At least I've heard they've gotten around some of the financial aid issues because of an exception. I know a student in an inaugural program who ran into this headache. It was a difficult year for them.

 

[VenusLux]

Hi there,

I am trying to choose a lender. Unless you know of a better lender, I'm looking at AAMC Medloans, MyRichUncle, or THE.

AAMC Medloans:
6.5% during disbursement
6.8%-0.75% ACH = 6.05% max at repayment
6.8%-0.75% ACH-1%immediate ontime payment benefit = 5.05% min at repay

But MyRichUncle and THE's conditions are guaranteed lower than AAMC's max:
MRU: 6.8%-0.25% ACH-1%auto benefit = 5.55%
6.8%-0.25%ACH-1%autobenefit-1.5%ontime payment benefit after
48 consecutive payments = 4.05% (good if in residency longer than 4 years)
THE: 6.8%-1.3%autobenefit = 5.5% (which you can lose and then gain back after an on-time payment)

I have a feeling AAMC's conditions are more stable than MRU and THE. MRU seems to have had a lot of interest gimmicks based on an SDN search (rates determined by your success in school or taking % of your salary as repayment instead), and THE? I'm not sure.

Any thoughts? Did I figure this stuff out correctly? Please post and also PM me so I know to check the forum. Thank you so much!

 

[Psycho Doctor]

How does marriage change what the government will give for loans and grants? Whereas when a person is not married they will look into the parents' income; does this change with marriage? Once the person marries and lives apart from their parents with a spouse; does the governemnt now just look at the joint account of the married couple, or do they for whatever strange reason involve parents' income into the equation?

 

[FamousPotatoes]

Hi there,

I am trying to choose a lender. Unless you know of a better lender, I'm looking at AAMC Medloans, MyRichUncle, or THE.

AAMC Medloans:
6.5% during disbursement
6.8%-0.75% ACH = 6.05% max at repayment
6.8%-0.75% ACH-1%immediate ontime payment benefit = 5.05% min at repay

But MyRichUncle and THE's conditions are guaranteed lower than AAMC's max:
MRU: 6.8%-0.25% ACH-1%auto benefit = 5.55%
6.8%-0.25%ACH-1%autobenefit-1.5%ontime payment benefit after
48 consecutive payments = 4.05% (good if in residency longer than 4 years)
THE: 6.8%-1.3%autobenefit = 5.5% (which you can lose and then gain back after an on-time payment)

I have a feeling AAMC's conditions are more stable than MRU and THE. MRU seems to have had a lot of interest gimmicks based on an SDN search (rates determined by your success in school or taking % of your salary as repayment instead), and THE? I'm not sure.

Any thoughts? Did I figure this stuff out correctly? Please post and also PM me so I know to check the forum. Thank you so much!

I was looking at your post and you miscalculated myrich uncle (I did the first time around too)

As I undersand it MRU's stafford is 6.8% during school, dropping to 5.55% at payment. There is also a 1.5% origination fee (they deduct 1.5% of the money you borrowed and keep it, so you get a smaller check)

That extra 1.5% after 48 months is a principal reduction, not an interest rate reduction.

So lets say after 4 years of payments you still owe 75,000. Of that 75,000, 70,000 is the principal (the money you initially borrowed) and 5,000 is interest from the in-school deferment period.

at that magic 48 month mark they deduct 1.5% of the 70,000 principal from your debt, or $1050, as a one time deduction, and you keep making payments on the remaining 73,950 (instead of 75,000) at the interest rate of 5.55%

That will knock your monthly payment down $5 or 10, but isn't nearly as significant as a 1.5% interest rate reduction.

Hope that helps.

 

[Nasem]

for undergrad studies, you have the
Stafford Subsidized and Unsubsidized Loans,
What if you run out of all the sub and unsub loans than you can borrow (like in my case)...

I am currently doing a post-bacc (which is considered an undergrad status) and all my sub and unsubsidiezed loans are finished, I have to pay for my education out of my own pocket.... I can't do that..... Is there any other way I can pull this off... does anyone know ?

Just for the record, I have no one helping me, no co-signer, and I am actually planning to quit my current job to go fulltime to school and finish my post-bacc...

Any suggestions would be GREATLY appreciated... thnx

 

[mshheaddoc]

I had the same issue in post-bacc. I had to go to private loans BUT I had to have my parents co-sign with me or keep working. Luckily I talked them into it after ALOT of discussion. If you have no one to cosign I'm going to suggest you keep your job otherwise without that income to use for your application you will not be able to qualify for private loans. I needed someone with an income and good credit to get my loans even though my credit was pretty good.

There's no sense in doing a post-bacc full-time if you can't get funding. I know there has been talk of some companies that are offering "no cosigner" loans to undergrads (I think this is the gimmick - I mean product that myrichuncle was going with) but I haven't researched them because last year these types of loans weren't available. You can try that route but your best bet is going to be to keep your job. JMHO.

 

[okbye]

Some loan companies have the benefit of cosigner release after so many monthly payments (usually 36-48). That might make it a little easier to get someone to cosign for you if they don't have to be stuck with it for 20 years.

 

[Nasem]

I had the same issue in post-bacc. I had to go to private loans BUT I had to have my parents co-sign with me or keep working. Luckily I talked them into it after ALOT of discussion. If you have no one to cosign I'm going to suggest you keep your job otherwise without that income to use for your application you will not be able to qualify for private loans. I needed someone with an income and good credit to get my loans even though my credit was pretty good.

There's no sense in doing a post-bacc full-time if you can't get funding. I know there has been talk of some companies that are offering "no cosigner" loans to undergrads (I think this is the gimmick - I mean product that myrichuncle was going with) but I haven't researched them because last year these types of loans weren't available. You can try that route but your best bet is going to be to keep your job. JMHO.

I totally appreciate what your saying,
But wouldn't med schools look down on me if I did all my post-bacc at a part-time basis and it will take me 2-3 years to do the classes I am plannig to do (which are more than just the standard pre-med stuff, I wanted to do additional stuff like biochem, micbro, immuno, physio, etc etc).

 

[mshheaddoc]

I totally appreciate what your saying,
But wouldn't med schools look down on me if I did all my post-bacc at a part-time basis and it will take me 2-3 years to do the classes I am plannig to do (which are more than just the standard pre-med stuff, I wanted to do additional stuff like biochem, micbro, immuno, physio, etc etc).

No, medical schools will not look down on you if you did it part time. Many people had to go that route and sometimes I wish I had maybe done that. I wouldn't have been in debt and taking a few classes at a time gives you a focus to "ease into" things. Now this is just my opinion though. People will debate that schools like to see a rigorous schedule, etc. But the fact is many people have applied while taking the pre-reqs part time due to other responsibilities. Its just a fact of life.

I realize it might take longer part-time but the good old saying on here (in the non-trad forum esp) is that this is a marathon, NOT a sprint. It will take a few years to get everything in order to apply. Technically you only need the pre-reqs to apply. If you are doing grade damage control I'd suggest doing the pre-reqs and seeing where you stand after the MCAT. Then consider an SMP program which you could get graduate federal funding for. But for all the classes you want to take you'd need at least 2-3 years anyway. And most of those classes are nice to have under your belt but not completely necessary to "apply" to medical school with. You could always take classes during your application year if you are looking for additional depth. I did all prereqs (minus chem) and about 5 other classes full-time in 2 years. So honestly it might not put you all that much behind if you just did well and took your time. The key word is "doing well". No matter what you take you need to do well. If your job is flexible and a means to pay the bills then go for it.

If you don't have a cosigner, what other options do you really have? If you want options on what to do with your post-bacc I'd suggest the non-trad forum where you might get some more responses. I could always move our discussion into a new thread there for you.

 

[Nasem]

thank you mshheaddoc

whatever you said did make sence, and I'd also like to add that the reason why Im taking the extra courses in my post-bacc is to actualy bump up my low undergrad GPA (Overall 3.02, BCMP of 3.3), I really wanted to bump it up to 3.2-3.3 then start applying to M.D schools and if that doens't pan out, then do SMP

 

[mychelle774]

Super helpful thread Mushy!

Is there a source for the best lenders for med students I can use to narrow down my current comparison of a bajillion different ones? My school does not have a list nor is it able to suggest lenders.

Also, do most students opt for a Consolidated Loan? If so, when do they consolidate?

 

[mshheaddoc]

Super helpful thread Mushy!

Is there a source for the best lenders for med students I can use to narrow down my current comparison of a bajillion different ones? My school does not have a list nor is it able to suggest lenders.

Also, do most students opt for a Consolidated Loan? If so, when do they consolidate?

I wish there was a source comparing all the lenders. Sadly there isn't. Overall though, sticking to one lender is the best idea in my opinion. It makes things ALOT easier in the consolidation period. Consolidation is only allowed while you are in your grace period or in repayment. You are no longer allowed to consolidate during deferment/in-school. As I've stated, some lenders promise you the world, just make sure you understand their terms. And interest rate deduction isn't really helping you if it turns your 30 yr loan into a 20 year loan by just keeping you at the same payment and "reducing" your interest rate. I'd rather have lower payments overall. Some of the gimmicks out there are rather hard to attain I've heard. So my suggestion is to stick to the main lenders we hear about on here. I'm not going to mention specifics since I've only had dealings with a few. I don't like sallie mae though. Just really loathe. Their rates are horrible IMO.

 

[ANMBAMOM]

I wish there was a source comparing all the lenders. Sadly there isn't. Overall though, sticking to one lender is the best idea in my opinion. It makes things ALOT easier in the consolidation period. Consolidation is only allowed while you are in your grace period or in repayment. You are no longer allowed to consolidate during deferment/in-school. As I've stated, some lenders promise you the world, just make sure you understand their terms. And interest rate deduction isn't really helping you if it turns your 30 yr loan into a 20 year loan by just keeping you at the same payment and "reducing" your interest rate. I'd rather have lower payments overall. Some of the gimmicks out there are rather hard to attain I've heard. So my suggestion is to stick to the main lenders we hear about on here. I'm not going to mention specifics since I've only had dealings with a few. I don't like sallie mae though. Just really loathe. Their rates are horrible IMO.

From what I have learned from research is that a lender who offers the most immediate benefit usually will save you the most. Non-profits are usually better (and no I don't work for a lender like some may think). I just want the best bang for my buck like everyone else!

 

[mshheaddoc]

From what I have learned from research is that a lender who offers the most immediate benefit usually will save you the most. Non-profits are usually better (and no I don't work for a lender like some may think). I just want the best bang for my buck like everyone else!

As I stated there are many opinions and "immediate" benefit doesn't always mean immediate. Reading the fine print works well. Non-profits aren't always the best route either, its really about the lender in general.

 

[mychelle774]

Thanks for the advice!

 

[okbye]

Be careful thinking non-profits are in any way better for you than regular corporations. The only thing non-profit means is that they don't have share holders to answer to and they get a tax break. They still have well paid executives and quotas to meet. There is an investigation into tax fraud going on right now with a non-profit private lender that is basically owned by one woman and the article was talking about the $30 mil private plane she bought and "business" trips involving taking her whole family and friends to Barbados, all on company money.
From Wiki - "Some 'non-profits' are operated by volunteers and/or paid positions. Recently some paid positions have come under question as the salaries of top level executives were in the millions of dollars per year. Additionally, a NPO may have members or participants or beneficiaries or students etc. as opposed to customers in a for-profit organization. One should not generalize about the comparative cost of a 'non-profit' verses 'for profit' organization; there may be a lot of internalized profit in a non-profit organization."

 

[Doctor Bagel]

I know there has been talk of some companies that are offering "no cosigner" loans to undergrads (I think this is the gimmick - I mean product that myrichuncle was going with) but I haven't researched them because last year these types of loans weren't available.

I've seen a lot of these commercials recently and am pretty curious about these, too. My hunch is that they're probably bad deals, and students might be tricked into doing these without going the fafsa route. If you notice the commercials include a lot of expenses that actually can be covered by federal financial aid like buying a computer and living expenses. I'm becoming more and more convinced that lots of student lenders are sleazy -- of course, this is after being bombarded daily with consolidation offers.

As for comparing lenders, one of my classmates compiled an excel spreadsheet with all the main lenders and their different incentives. It was interesting because some deals worked out better for people who paid off the loans in 10 years and some were better for people banking on the 30 year payoff. As I recall, the aamc loans came out the best for people planning to pay off the loans in 10 years, and THE was best for people planning on 30 years. I guess the mathematically inclined people can do their own spreadsheets.

Also, you don't have to use your school's preferred lender list.

 

[yadayadadude]

I have $10K in the form of an unsubsidized Stafford that I'm hoping to pay off before graduation (new MS4 here, but not graduating this year - likely next year). It's my only unsub Stafford and I'm itching to get rid of it and just might be able to. This might be a dumb question, but is there any special protocol for paying off a loan before you graduate? Can I just send a check to my lender? Do I need to contact my fin aid deparment and give them a heads up?

 

[GatorPhD]

Thanks in advance, this is a great thread!

Ok, here goes...My wife and I (both 25) currently make low 6-figs. We're frugal. We own our home, max out the 401K's and Roths, and have some savings. We're planning on (trying to) sell the house and move to a place where we can complete postbac programs next summer. I need a PBPM program and she needs a SMP.

The PBPM is undergraduate level and of course the SMP is grad level. Can we get federal aid to help offset some of these costs? If so, please expound a little.

If we can sell the house (we live in FL and the market hasn't exactly rebounded yet) that would give us around 100K in cash. I think that should be enough to live on and pay tuition for a year of postbac for the two of us. But suppose I don't wanna use all my cash, are their options? Or suppose we can't sell the house and have to rent. How does that work?

Then comes med school. Are we hosed because we have a reasonably high net worth when compared to other applicants.

Thanks Again!!!

 

[abbaroodle]

Questions I had before starting med school:
- How to finance applications!!!
- How to finance your move\setting up your apt. You dont get loan money until after you start and it cant cover previous expenses. (So you cant even buy stuff on your credit card and pay it off after you get your loan check if you need all your refund just for rent and food!)
- Car. Many med schools require (or in reality require!) you to have a car. Yet you cant use aid money to pay for it. Any suggestions?

Questions during med school:
- Medical insurance - especially if taking a year off and not covered by any policy, including your school's lousy excuse for health insurance. And especially if you have pre-existing conditions!!!
- Medical bills - anyone with success getting the hospital where they go to school to waive a huge hospital bill??? Or the only option is really higher-interest private or gradPlus loans?
- Why do I get penalized for saving or working? Shouldnt I be rewarded for saving my money rather than spending it all????
- Why do I get penalized for my parents' income and is there anything I can do about it? They arent helping me any more than my classmates whose parents have little income, yet my classmates get huge scholarships and grants from my school and I dont! And, yes, I am bitter!

Things to remember:
- Medical school is a decision. I knew I would have about ~200,000 in debt when I graduated and decided to apply and go anyway. I need to remember this was a choice I made.
- When thinking about health insurance, look at max limits. Some of them are really low. While $50,000 may not seem so low, a few hours in the OR and a night in the hospital can easily push you over that (for example, after an injury or for appendicitis). Now imagine if you actually got sick!!!
- Another insurance considerations: look at out-of-pocket max limits. While 10% copay seems totally reasonable, if you have that $50,000 hospital bill all of a sudden thats $5,000!!!
- "You know you are a second yr med student when you want to drop out of school but your loans are too large to allow you to do so."

 

[robnon]

I had a question about consolidation. When you graduate from med school, lets say you have $250k in debt. How many years do you have to pay it off? I heard it is usually 10 years. If so, can you pay a small monthly payment for the first few years and then more in say the last 5 years (when hopefully your salary increases, resident to attending). Can you consolidate for a long period of time (say 25 years) like you can with UG loans? Also, I heard from a friend that some doctors can roll their debt into their home mortgage, which I guess is similar to pay the loan down over 30 years. Does that sound crazy? Thanks!

 

[mshheaddoc]

You can consolidate all your loans (federal and yes including undergrad) into one loan with a longer repayment. 25-30 years depending on the lender. Look at some consolidation websites for more information on specifics Consolidation loans usually ask to have the extended repayment.

 

[mshheaddoc]

I have $10K in the form of an unsubsidized Stafford that I'm hoping to pay off before graduation (new MS4 here, but not graduating this year - likely next year). It's my only unsub Stafford and I'm itching to get rid of it and just might be able to. This might be a dumb question, but is there any special protocol for paying off a loan before you graduate? Can I just send a check to my lender? Do I need to contact my fin aid deparment and give them a heads up?

As far as I know there are no prepayment penalties. But just call your lender and ask where to send the check!!

Thanks in advance, this is a great thread!

Ok, here goes...My wife and I (both 25) currently make low 6-figs. We're frugal. We own our home, max out the 401K's and Roths, and have some savings. We're planning on (trying to) sell the house and move to a place where we can complete postbac programs next summer. I need a PBPM program and she needs a SMP.

The PBPM is undergraduate level and of course the SMP is grad level. Can we get federal aid to help offset some of these costs? If so, please expound a little.

If we can sell the house (we live in FL and the market hasn't exactly rebounded yet) that would give us around 100K in cash. I think that should be enough to live on and pay tuition for a year of postbac for the two of us. But suppose I don't wanna use all my cash, are their options? Or suppose we can't sell the house and have to rent. How does that work?

Then comes med school. Are we hosed because we have a reasonably high net worth when compared to other applicants.

Thanks Again!!!

For SMP she'll be eligible for grad aid and for post-bacc you'd be eligible for 1 extra year of undergrad financial aid if you graduated in the standard 4 year time frame with your original degree. I'd suggest using these options, maxing out on federal aid and using your housing proceeds for living expenses. High net worth wouldn't hurt you that much from what I've gathered. You will still be eligible for ALL federal aid. Remember that. You might not just get as much need based aid (which schools are stingy with anyway) but you still will have scholarships and SOME need aid available!

 

[TMP-SMX]

With THE does paying during school or residency deferment go toward interest or principal? Also, I wasn't sure if interest is actually added to the principal balance before the end of deferment. Whatever the case, if interest is added once a year (month)? then it would be advantageous to pay a larger amount as possible to pay before interest is added.

 

[soonerfan77]

The financial aid office at my school will allow for increases in living expenses(rent, food, transportation, etc.) When I submit my lease for an increase in rent expenses, will the finaid office split the total amount of rent since my wife's name is also on the lease?

 

[sweetmelody]

I would like to get a private loan to pay off my CC debt. For me this makes since because I am sure I could get a better rate and free up money while I'm in school. However, every loan I looked at seems to have the stipulation that they provide loans to make up the difference between cost of attendance and aid and they require certification with the school's FAO. What type of loan would I need to apply for in order to circumvent the FAO?

 

[TMP-SMX]

I would like to get a private loan to pay off my CC debt. For me this makes since because I am sure I could get a better rate and free up money while I'm in school. However, every loan I looked at seems to have the stipulation that they provide loans to make up the difference between cost of attendance and aid and they require certification with the school's FAO. What type of loan would I need to apply for in order to circumvent the FAO?

Have you used the max in staffords and grad plus loans already? Credit card debt is no good, but it's not a good plan either to get private loans that are variable. If you have a good credit score get cards with low interest rates or no interest for a year and put the money on them. Pay it back as you can with federal loans. (Always pay minimum balance)

 

[mshheaddoc]

Have you used the max in staffords and grad plus loans already? Credit card debt is no good, but it's not a good plan either to get private loans that are variable. If you have a good credit score get cards with low interest rates or no interest for a year and put the money on them. Pay it back as you can with federal loans. (Always pay minimum balance)

I agree. This is probably the best bet. If that isn't goign to work, try for the private loans but I am guessing you might have to pay them back a little at a time (pay the credit card down I mean if you have a large balance you might not get that sum all at once - even some private loans require the student to get approval from financial aid). For the list of lender to direct consumer loans, I'm not sure of the complete list. Some have mentioned chase and citibank though. Nelnet has a similar loan but only some schools participate, they will contact your school on your behalf to see if they'd accept the loan.

 

[mshheaddoc]

With THE does paying during school or residency deferment go toward interest or principal? Also, I wasn't sure if interest is actually added to the principal balance before the end of deferment. Whatever the case, if interest is added once a year (month)? then it would be advantageous to pay a larger amount as possible to pay before interest is added.

If you are in deferment I'm goign to guess it would go to interest first then principle, but I'd ask THE and let us know. I'm not entirely sure on that. Most don't pay antyhing other than the interest that I know. Ha!

 

[mshheaddoc]

The financial aid office at my school will allow for increases in living expenses(rent, food, transportation, etc.) When I submit my lease for an increase in rent expenses, will the finaid office split the total amount of rent since my wife's name is also on the lease?

Well that you might have to talk to them about. They might ask if she'll be working etc and you might have to negotiate with them. Unless its an outrageous amount of rent they might give you only a partial subsidy. Medical school is about living a little cheap, even if you are married (not to be blunt but I'm sure you understand what I'm getting at). They might ask why this apartment if housing is a lot cheaper on average. But if its not that much above the average and you're doing it for family reasons I think they might realize that. I can't answer the question directly, only your FAO can.

 

[sweetmelody]

Have you used the max in staffords and grad plus loans already? Credit card debt is no good, but it's not a good plan either to get private loans that are variable. If you have a good credit score get cards with low interest rates or no interest for a year and put the money on them. Pay it back as you can with federal loans. (Always pay minimum balance)

Okay, so maybe I'm a little confused. I was under the impression that I could not borrow more than the COA for my school. My financial aid package consists of stafford loans (sub and unsub) and a loan from my school, but this completely covers the estimated COA. So from this, it would seem that I can't increase the amounts on the stafford loans or take out a PLUS. What I want is an additional loan that wont take away from my fin aid package, so that I can use that money to pay off the CC debt. I hope this makes sense.

 

[dumbdoc]

I read on another post that it is illegal to use student loan money for investments. I have never heard this before and doubt the souce. I would love if someone could provide a link to a reliable source that either confirms or rebuts this issue.

Everyone says that you can just take the stance that you were investing your own money while using the student loan money for educational purposes, but I want to straight up know if it is illegal or fraudulent to take out student loans and invest the money.

 

[TMP-SMX]

I read on another post that it is illegal to use student loan money for investments. I have never heard this before and doubt the souce. I would love if someone could provide a link to a reliable source that either confirms or rebuts this issue.

Everyone says that you can just take the stance that you were investing your own money while using the student loan money for educational purposes, but I want to straight up know if it is illegal or fraudulent to take out student loans and invest the money.

Ok. You have to put the money into some bank account correct? I would recommend not going crazy and rather than using a brick and mortar account to open an online savings account. I have Citi ultimate savings and it gives 4.75%. You are limited to 6 transactions per billing period as with every other account regulated by federal law. The account is FDIC insured so therefore you have nothing to worry about. No it is not illegal (realistically) to invest. Depends of course what you call an investment. There are low risk and high risk investments. Be smart and remember that you shouldn't be taking out the money in the first place if you aren't really going to need the full amount. It's unlikely you are going to beat 6.8% in the short term since that is the time you are going to be using the money anyway. Either way, it should be a small enough amount in loans extra that a few more percent won't be much difference short term.

Okay, so maybe I'm a little confused. I was under the impression that I could not borrow more than the COA for my school. My financial aid package consists of stafford loans (sub and unsub) and a loan from my school, but this completely covers the estimated COA. So from this, it would seem that I can't increase the amounts on the stafford loans or take out a PLUS. What I want is an additional loan that wont take away from my fin aid package, so that I can use that money to pay off the CC debt. I hope this makes sense.

You are correct. What is your CoA? Usually they are pretty generous. I'd talk to the FA office and try to get it increased if need be if you have kids/emergency repairs for a car/computer to replace. If you really went through a budget to figure out how much you will spend and still need more money to pay off your CCs then yes you will need private loans. However it is best to not have to take out the private loans if at all posible.

 

[mshheaddoc]

bump

 

[mshheaddoc]

I got this PM and I figured I would answer it for everyone who is curious ....

I'm a 4th year who consolidated loans for my first 2 years and have the final 2 years unconsolidated at this point. the school told us in our exit interview that it was not smart to consolidate for a lower interest rate since we would lose borrower benefits - however, if the rates get cut as expected and come down to 3.3% why would i not want to consolidate these last 2 years of loans when it is highly unlikely that borrower benefits will lower my rate to this new 3.3%???

First off, since you can't consolidate in school anymore, anyone who does have SOME consolidation is lucky!!!

Right now trying to find someone that will actually DO your federal consolidation is going to be a chore. I am actually trying to consolidate my husband's loans with nelnet with no success. Right now many of the larger lenders are holding off on consolidations until things clear up with verbiage in the new laws that were passed back in Oct (the one that also affects the resident deferment). So for right now I would suggest just holding off esp since you have most of your loans at 6.8% fixed anyway. If you have a few at a lower rate, you might call to inquire about how that would work with lowering your rate but right now I'm wondering what the gov't will do with these 6.8% loans that are way higher than current market standards (esp in consolidation). Some lenders are offering different payment plans rather than consolidating so if you are with just one lender this might be an option to look into.

Best of luck!

 

[MikeyLu2010]

Im one of the unlucky ones that picked T.H.E. for my student loans (stafford + gradPLUS x 2 years)

Couple of questions:

Do i need to move all my debt from T.H.E. to another lender? Or still deal with them.

 

[garnet205]

I was wondering about the interest rates. Is the rate assigned at the time of application, time of approval, or the time you actually get the money for the loan at the beginning of the semester?

 

[141837]

Hi,

Just wondering if anyone has come across an NSLDS-like site but for privates/alternatives? I'm with the THE crowd, with some previous graduate debt, and would like to find my cumulative privates w/o dealing with my FA office as I'm on the road for a few more months.

Thanks for any suggestions!