Family living entirely off of loans

[blee]

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I've now seen more than one anecdotal reference to families who have managed to live through medical school entirely on loans. My wife is smart and a hard worker, but she would much much rather be a stay-at-home mother than have to work and pay for child care while I'm a student. Seeing as my decision to go back to school kind of put a wrench in our child care situation, I want to see if we can make it happen for her anyway.

So, how does it work? I don't think the usual sources of federal student aid will be enough to cover me, my wife, our daughter, and any other future members of our family. Anyone with experience care to share?

 

[medicalbound]

I'm with you blee. I also would like to hear what others have done. From what I understand, the federal loans max out at ca. $150k. After that, you can borrow from private lenders. My wife has been a stay at home mom now for the past 5 years and we have 3 small kiddos. We're looking to do the same thing. We have a substantial amount of equity in our home that we'll be putting on the market this spring, and we're entertaining the idea of the HPSP scholarship. Without the scholarship, we're looking at at least 200k in loans. Many of the other scholarships out there are geared toward primary care and I'm looking at EM. Any advice on options would be great!

 

[Doctor Bagel]

I'm with you blee. I also would like to hear what others have done. From what I understand, the federal loans max out at ca. $150k. After that, you can borrow from private lenders. My wife has been a stay at home mom now for the past 5 years and we have 3 small kiddos. We're looking to do the same thing. We have a substantial amount of equity in our home that we'll be putting on the market this spring, and we're entertaining the idea of the HPSP scholarship. Without the scholarship, we're looking at at least 200k in loans. Many of the other scholarships out there are geared toward primary care and I'm looking at EM. Any advice on options would be great!

some good news -- staffords max at $189k. 🙂 as a person who's already borrowed $50k, i pay close attention to that number.

 

[thegenius]

I'm in the same boat too. My wife works, and we have one kid. Second one is due in late June. I don't want her to work (and neither does she) if all of her income goes towards day care. BTW, for what it's worth, day care in San Francisco is about $1,600/child/month. My wife takes home about double that in salary, what is the point of working if all the money goes towards day care?

I have this impression in my head that I'm going to be leaving med school with about 100K in debt. I think I have to get rid of that impression.

I'm obviously going to fill out the FAFSA and talk to the schools I've gotten into already. Thankfully, one of them (a private school) reputes to keep their indebtness really low and empirically that is true. But those numbers are averages for students who are single, not married with 2 kids!

 

[Beau Geste]

I don't want to be devil's advocate, but the thought of living off loans for 4 years when my spouse can work makes me nervous. I'm not sure about the particular schools you guys will be attending, but maybe the affiliated hospitals or universities has subsidized daycare? Or what about in-home daycare costs (someone else's home)?

Otherwise, I see your points. From your numbers, it will cost $19,200 per child a year out of your loans for daycare. So for two kids, that's $38,400 a year or $153,600 over four years for daycare from loans alone. **OUCH**. Doesn't leave much for tuition!

Sometimes I'm glad to be living in a low-cost part of the country!

 

[blee]

The best financial decision would certainly involve my wife working full time. She makes more than enough to make full-time child care a reasonable cost from a financial perspective. And maybe that's the way it's going to end up.

I'll freely admit that having my wife stay at home is somewhat idealistic, but she would really like to do it and I'd like to help if possible. One of the big sticking points we had as I made my decision to pursue med school was the family issue. Most of our friends have made arrangements for mom to stay at home, and we were planning to do the same. It was a really big deal for her, and I don't like that I've put such a big kink in her family goals.

 

[Static Line]

The best financial decision would certainly involve my wife working full time. She makes more than enough to make full-time child care a reasonable cost from a financial perspective. And maybe that's the way it's going to end up.

I'll freely admit that having my wife stay at home is somewhat idealistic, but she would really like to do it and I'd like to help if possible. One of the big sticking points we had as I made my decision to pursue med school was the family issue. Most of our friends have made arrangements for mom to stay at home, and we were planning to do the same. It was a really big deal for her, and I don't like that I've put such a big kink in her family goals.

We do it! We got ourselves out of debt before starting med school. We saved a little cash. My wife homeschools our daughter. We live entirely off of school loans now. Sure it is a little tight but so what. I am happy, my wife is happy, and so is my daughter. In a few years this won't matter anyhow. If you want to do it you can do it.

 

[Non-TradTulsa]

I'm obviously going to fill out the FAFSA and talk to the schools I've gotten into already. Thankfully, one of them (a private school) reputes to keep their indebtness really low and empirically that is true. But those numbers are averages for students who are single, not married with 2 kids!

I'm single and probably shouldn't even post in this thread. When you talk to your schools, however - keep in mind that federal methodology no longer allows student loan budget adjustments to support a family (seems kind of anti-family!). You'd have to find a way to scrape by on the single budget - if I understand what I've read (although childcare adjustments are allowed). If anyone understands the few private lenders who will allow a student to borrow above the student's official Cost of Attendance, please let me know. I've had a post on this subject languishing in the Financial Aid forum for over 2 weeks with no responses. I don't know if the Financial Aid forum is that boring, or if I managed to make somebody angry with me! 🙁

 

[medicalbound]

We do it! We got ourselves out of debt before starting med school. We saved a little cash. My wife homeschools our daughter. We live entirely off of school loans now. Sure it is a little tight but so what. I am happy, my wife is happy, and so is my daughter. In a few years this won't matter anyhow. If you want to do it you can do it.

Static, if I may ask, have you had to go to private lenders or are you living solely on federal loans (follow on to non-tradtulsa's question)?

 

[blee]

Static, if I may ask, have you had to go to private lenders or are you living solely on federal loans (follow on to non-tradtulsa's question)?

Same question here. I wanna know! 🙂

 

[kimmcauliffe]

Wow, glad someone made a post from this. As an Air Force vet, I get the GI Bill every month I'm in school, but it's due to run out before I start med school. So it'll work out nice- no debt before med school. My fiance has chronic back problems and can't really work, so this topic has definitely been on my mind from the word go.

Good luck to you all out there...

 

[Static Line]

Static, if I may ask, have you had to go to private lenders or are you living solely on federal loans (follow on to non-tradtulsa's question)?

The only private lenders I went to were the ones my school suggested during our financial aid orientation. In fact, it was set up so that all the paperwork was completed when I did the paperwork for my federal student loan, and it was all lumped together in one process. If your school financial aid office is worth anything they will make sure you have what you need, and help you through the process. They are not successful if you can't stay in school, so usually they help out every way possible. I did not have to go outside of the system already set up to give us the max school loans available to secure anymore loans. I am not sure if you did that that those loans you secure on your own would be considered school loans. You may have to start a repayment plan immediately with those type of loans, something I am avoiding.

The max you can get is accoding to what your school financial aid office budgets for its students. The max by law for total student loans is around 230k and my school almost budgets that for us. After school tuition is paid, we have roughly $2100/month to live off of. It isn't much but we are making it. I also don't live or go to big city school so cost of living is cheaper where I am at.

 

[thegenius]

The max you can get is accoding to what your school financial aid office budgets for its students. The max by law for total student loans is around 230k and my school almost budgets that for us. After school tuition is paid, we have roughly $2100/month to live off of. It isn't much but we are making it. I also don't live or go to big city school so cost of living is cheaper where I am at.

Static Line, you have a wife and one child, right? So, after tuition you have $2,100 for rent, utilities, food, entertainment. Is that right?

Given this, how much do you expect to be in debt by the time you graduate from med school? I'm just trying to give myself a *very rough* estimate of how much we will have vs. debt load. I have a wife and child too (and another coming up).

I know it's all contingent on the kind of financing we will have, but will you be 150K in debt by graduation with $2,100/month? Hmm...probably more, that would mean your tuition over 5 years = $50K, which is possible at a cheap in-state school.

 

[Static Line]

Static Line, you have a wife and one child, right? So, after tuition you have $2,100 for rent, utilities, food, entertainment. Is that right?

Given this, how much do you expect to be in debt by the time you graduate from med school? I'm just trying to give myself a *very rough* estimate of how much we will have vs. debt load. I have a wife and child too (and another coming up).

I know it's all contingent on the kind of financing we will have, but will you be 150K in debt by graduation with $2,100/month? Hmm...probably more, that would mean your tuition over 5 years = $50K, which is possible at a cheap in-state school.

My school alots us $53 or 54k/yr*4 years. Covers tuition at 29.5k/yr, and living expenses. Some schools alot even less than that. You have to talk to the fin aid person at your school to find out what they alot. It's tight but we do it, and I will have to get all the student loans I am eligible for. It is not a cheap process for a broke married person w/o a wealthy family to help out. Save all you can save before you start. We did and it has helped.

 

[tigress]

This is a really interesting thread. If I end up deferring next year I'm going to have to decide whether to work part-time or not. I'd much prefer not to work, because that will just bring up the issue of childcare, which isn't really worth it on a part-time salary. My husband has only taken out loans for tuition this year, as I've been making enough money to support us. One thing I have noticed is that the allowable budget is actually quite a bit higher than our own budget, meaning they budget quite a bit more for food and entertainment, etc, than we actually spend. We're incredibly frugal (but no less happy for it!). So living off loans may be possible. The only problem is I've only ever budgeted for the two of us, not including a baby. So I'm not even sure how to take that into consideration. My parents are willing to help out a little, but of course that's limited.

 

[thegenius]

This is a really interesting thread. If I end up deferring next year I'm going to have to decide whether to work part-time or not. I'd much prefer not to work, because that will just bring up the issue of childcare, which isn't really worth it on a part-time salary. My husband has only taken out loans for tuition this year, as I've been making enough money to support us. One thing I have noticed is that the allowable budget is actually quite a bit higher than our own budget, meaning they budget quite a bit more for food and entertainment, etc, than we actually spend. We're incredibly frugal (but no less happy for it!). So living off loans may be possible. The only problem is I've only ever budgeted for the two of us, not including a baby. So I'm not even sure how to take that into consideration. My parents are willing to help out a little, but of course that's limited.

Yea, we are not frugal unfortunately. And that's why I am starting to think about this on a daily basis. The one thing my wife said she is scared about is having little or no money while I'm in school, and I've tried to reassure her that we can just borrow money. But now I'm beginning to realize that there is a real chance that we will be borrowing > 200K, which affects several things. Not only what happens during med school for us, but also what kind of medicine I want to go into. It might be worth it for me to go into a speciality that makes more money because I'll be in more debt. And my earning potential is 10 years less than someone who is 22 and going to medical school.

All very interesting. I need to call Cornell and USC this month and talk to them about this.

 

[medicalbound]

...But now I'm beginning to realize that there is a real chance that we will be borrowing > 200K, which affects several things. Not only what happens during med school for us, but also what kind of medicine I want to go into...

We are in the same boat. I've known for some time that we would be looking at >=200K, but I thought the monies would be available through federal and private lenders -- now I think this might be limited by what others have stated (can only borrow the max cost of attendance as dictated by the school). I am setting up a meeting with the financial aid office within the next week or two to get answers from the horses mouth (so to speak). I'll post what I find out, although it may only apply to Colorado.

Problems being what they are, I am still ever so grateful to have these problems. Know what I mean?

 

[DrMom]

Some schools will allow adjustments to the budget. My husband stays home & my school allows us to adjust our budget & borrow from private lenders. I only borrow what we need, but I have yet to be turned down when I tell the fin aid office that i need more $. My understanding is that not all schools do this, but that's strictly hearsay on my part as I'm only a med student at one school. 😉

 

[pseudoknot]

Some schools will allow adjustments to the budget. My husband stays home & my school allows us to adjust our budget & borrow from private lenders. I only borrow what we need, but I have yet to be turned down when I tell the fin aid office that i need more $. My understanding is that not all schools do this, but that's strictly hearsay on my part as I'm only a med student at one school. 😉

Every school I've asked about this insists that they don't adjust budgets, yet I've been told by a number of current and former med students that once you're in, you can borrow as much as you need. I'm starting to wonder if this is something a lot of schools do, but don't advertise (kind of like deferrals).

 

[tc13]

I personally do not like the idea of debt especially for living expenses. My wife graduated from nursing school a year ago, loves her job, and in philosophy or theory she's encouraging about my finishing school and attending medical school. Problem comes when we discuss 4yrs of school and 4 yr residency. Even if I have the money saved to do med school with no debt, living for 4 years on her salary is scary. We'll have to supplement it with savings. The money saved will be about gone when I start residency. That's about the time our son starts college. Loans as a back up may be a necessity. She asks "what about vacations, trips, home improvments, ....?"
The bottom line is to leave my income and business for 8 years seems crazy.
The other choice is to stay in my field and run my company doing something I am good at, but have little passion for now. How much passion will I have for it in 8 years? During her time in school, I just wrote the checks for her and never said a word. I was glad to do it. For now, I guess that all that any of us can do is work hard every semester and save, save, save.
Tim

 

[Beau Geste]

Just curious -

How did the schools assess your financial need? Together, my husband and I make a decent amount, but when I start school someday we'll be reduced to his salary, which is between 47-50K depending on the year. Out of this will be house payments, etc. Do they go by the year previous to matriculation or anticipated needs?

If I were to stay close to home, really all I would need would be tuition, but if I went a little further, I would need about 500-700/mo extra for housing.

I've never had to use financial aid before! I've always either paid my own way or had scholarships/stipends 😱

Maybe someone can educate me on this or point me to a good thread or info about it.

Thanks!

 

[ShyRem]

There are lots of us (ME!) who live on and raise two children on 47-50K/yr. With mandatory retirement and taxes, we only take home a little more than half of that. Yup, half. And yes, we own a house. And we make it. You make sacrifices, you figure out how to save money so you can do some fun stuff (karate lessons, ski passes). You do your own home repairs. You work on your own cars. You eat out at most once a month. You don't go on vacation to Disneyland, you go camping. It's totally doable and still live well. And yes, we pay $800/month for our mortgage.

 

[Beau Geste]

There are lots of us (ME!) who live on and raise two children on 47-50K/yr. With mandatory retirement and taxes, we only take home a little more than half of that. Yup, half. And yes, we own a house. And we make it. You make sacrifices, you figure out how to save money so you can do some fun stuff (karate lessons, ski passes). You do your own home repairs. You work on your own cars. You eat out at most once a month. You don't go on vacation to Disneyland, you go camping. It's totally doable and still live well. And yes, we pay $800/month for our mortgage.

We don't have kids, but we do have a $1500 mortgage (with our neighborhood association fees, insurance, and taxes included), utilities, credit card debt, and car payments. By the time I go to med school, the credit cards and car payments will be gone, but with my husband's take-home salary, house payments and utility payments, we won't be able to afford tuition, too.

We already do our own repairs, including major remodeling projects (new kitchen). We went to vacation at Disneyworld because it was our honeymoon, and the housing was free.

Other than that I am the frugal one keeping us grounded, but we will still need $$ for necessary costs. I'm just not sure how it works with us having the 2 incomes now (with me earning more) and then reduced to 1 income. It's so darn confusing, but the schools are supposed to help with that, right?

 

[Doctor Bagel]

Other than that I am the frugal one keeping us grounded, but we will still need $$ for necessary costs. I'm just not sure how it works with us having the 2 incomes now (with me earning more) and then reduced to 1 income. It's so darn confusing, but the schools are supposed to help with that, right?

This is similar to my situation, and I'm not anticipating that my husband's income and my income for last year will make a big dent in my eligibility for aid. Of course, I've already resigned myself to borrowing for the bulk of my education -- spousal salary could kick you out of getting lots of need based grants, I think. The good (well, bad) thing is that need dependent federal loans make up such a small part of loan packages. You can borrow $8500 in subsidized Staffords, and I think Perkins loans are also need-dependent but weird (schools decide how to allot them). At one school, they told us that since the $8500 for Staffords is so small, you have to make a ton of money to not qualify for it. So, I think we can all get that unless we're super-wealthy. Unsubsidized staffords and private loans aren't affected by need, so we can qualify for those regardless.

 

[Beau Geste]

This is similar to my situation, and I'm not anticipating that my husband's income and my income for last year will make a big dent in my eligibility for aid. Of course, I've already resigned myself to borrowing for the bulk of my education -- spousal salary could kick you out of getting lots of need based grants, I think. The good (well, bad) thing is that need dependent federal loans make up such a small part of loan packages. You can borrow $8500 in subsidized Staffords, and I think Perkins loans are also need-dependent but weird (schools decide how to allot them). At one school, they told us that since the $8500 for Staffords is so small, you have to make a ton of money to not qualify for it. So, I think we can all get that unless we're super-wealthy. Unsubsidized staffords and private loans aren't affected by need, so we can qualify for those regardless.

Thanks for the info. I am financial aid ignorant, and I really need to figure it out before I get accepted.

 

[ShyRem]

Well, when I went back to school for my undergrad in the last three years, we still had the same financial situation as above. And I qualified for all my tuition and most of my living expenses. I think our EFC was only about $5-6K/yr. Really, our taxable income was only like $31K/yr on our income tax forms (after deductions and exemptions), so we qualified quite well for financial aid. I anticipate pretty much the same deal wherever we go.

 

[thegenius]

We are in the same boat. I've known for some time that we would be looking at >=200K, but I thought the monies would be available through federal and private lenders -- now I think this might be limited by what others have stated (can only borrow the max cost of attendance as dictated by the school). I am setting up a meeting with the financial aid office within the next week or two to get answers from the horses mouth (so to speak). I'll post what I find out, although it may only apply to Colorado.

Problems being what they are, I am still ever so grateful to have these problems. Know what I mean?

Well, to a degree yes. I think we are in a different situation than applicants who have less fiduicary responsibilities/needs than us.

At some point, the excess in borrowing just makes medical school completely untenable. I would not go to med school if I had to borrow $500,000. That's like owning another home. $200,000 is also a ton of money. Also the amount of money borrowed is a factor in what kind of medicine you want to practice. I just spoke to a pediatrician who subbing in for my main one, and she is 18 months out of residency, working and living in San Francisco. She said that she may not be able to live in San Francisco and be a pediatrician. She simply does not make enough money and has too much debt.

It really is a big, practical concern. I'm not concerned about finding funding sources, I'm concerned about the size of my overall loan.

I'm incredibly fortunate that I got into a few schools, perhaps a few more by the time this process ends. But now I'm under a different sort of pressure/stress than what I experienced back in July, when I started getting secondary applications and wondering if I'll ever interview anywhere. It is perhaps not as stressful, but nonetheless difficult.

We are going to have two infants by the time I start school!

 

[Mom2five]

We have five kids and live entirely off of loans. It is hard. We entered into this with no credit card debt but now have a substantial amount. Going to a foreign school proved to be very expensive due to unexpected emergencies/flights home. Our kids are young and there is no job I could get that would even cover childcare care expenses. So it can be done. We are trying to not freak out about the debt and just try to stay positive and live in "today". I'll be able to work later (during residency for example) if needed.

 

[Static Line]

Some schools will allow adjustments to the budget. My husband stays home & my school allows us to adjust our budget & borrow from private lenders. I only borrow what we need, but I have yet to be turned down when I tell the fin aid office that i need more $. My understanding is that not all schools do this, but that's strictly hearsay on my part as I'm only a med student at one school. 😉

I know our school refused a couple of students who requested more money after spending all they had. In fact, I have a friend who told me today that they are out of money and have to wait until next months disbursment for more. They are all single though. Perhaps they would be a little more forgiving to a married student with a family but I don't want to be the one to test that water.

 

[gdbaby]

I'm with you blee. I also would like to hear what others have done. From what I understand, the federal loans max out at ca. $150k. After that, you can borrow from private lenders. My wife has been a stay at home mom now for the past 5 years and we have 3 small kiddos. We're looking to do the same thing. We have a substantial amount of equity in our home that we'll be putting on the market this spring, and we're entertaining the idea of the HPSP scholarship. Without the scholarship, we're looking at at least 200k in loans. Many of the other scholarships out there are geared toward primary care and I'm looking at EM. Any advice on options would be great!

Medbound, my husband will quit his job and watch our kids if you can get me into Colorado! 😉

 

[ShyRem]

medbound, if you can also get me into CU, my husband will cook, clean, do the laundry, and home repair while gd's watches children.

 

[gdbaby]

medbound, if you can also get me into CU, my husband will cook, clean, do the laundry, and home repair while gd's watches children.

My hubby also has a PhD so he can teach the kids. Or Park Hill Elementary is an excellent K-8 school 3 blocks from my house, 8 blocks from the school.

 

[ShyRem]

EXCELLENT! Now if only CU would cooperate!

 

[ramblin_med]

I am in a similar situation now.

When I was about to start my first year (I am MS2), my wife had just completed college and was 7 months pregnant. Initially the financial aid office gave me a lot of flack. When I told them that she had a college degree they warmed up quite a bit. It was obvious she was not a housewife (as if that should have mattered anyway). My school breaks down loans specifically, so I gave them a notice in writing of detailed expeditures needed for her and the child. They were very nice about it.

This year we put the child in the subsidized daycare and the wife went to work. That experiment is over. It just was not worth it for us. Having a continually sick kid (imagine a daycare for kids of hospital workers), a wife always gone, and still no money was not fun. Now we are back to her staying home, and borrowing a little bit more money. I figure the money is worth a lot more to me now than it will be in 5-10 years. Our budget is just over 1600/month (w/no car needed), which we are happy with. I plan on going into rural primary care, so I can hopefully get some repayment assistance.

Summarized version:
Finance offices initially don't want to give you more money. You are a spoiled brat until proven otherwise. Tell them your situation, and they will usually be very helpful within their power.

My son's daycare was great, but it was still expensive and made him sick all the time.

Med school stress + wife's job stress + baby stress= too much stress

Good luck!

 

[Gatewayhoward]

The idea of living off student loans is a new world to me. That's why I'm teaching myself investing.

 

[Static Line]

The idea of living off student loans is a new world to me. That's why I'm teaching myself investing.

Better have a lot of cash to invest; or just get really good at day trading.

 

[thegenius]

The idea of living off student loans is a new world to me. That's why I'm teaching myself investing.

Oh yea, I'm really into investing too. I follow the stock market and trends vigorously. And I'm finally doing well...I think this past year I made between 25%- 30% gain in the market (unofficial, i need to still crunch the numbers) and that takes into account some big losses I had in April to purchase an investment property (which itself has done well).

DON'T do daytrading. It is possible to make money with day trading but it takes a lot of experience and dedication to make money. My friend parlayed 25K into 75K in about 9 months, which he used as a downpayment on a house. But he was up every monring 30 minutes before the market opened, reading websites, etc. He also bought expensive software to help him out. I'm going down that road. I'm happy right now with the Canadian Royalty Trusts that pay about 10% divy yield, amortized over each month. I'll probably just stick with those while I'm in med school unless the oil and energy markets do something drastic within the next 4 years.

 

[Static Line]

DON'T do daytrading.

I was being a smart a$$ when I suggested daytrading. It is a novel concept to try and live off of investment money instead of taking out student loans. But if I had that kind of investment money to live off of the return in the first place, I probably wouldn't be in med school today. Probably be on an island somewhere.

 

[oldManDO2009]

I am an MS I with 2 kids (2 y.o & 1 y.o) and my wife is taking a year off work to avoid crazy daycare cost in California. I am an RN so I work weekends and supplement our finances. We will have a financial crisis soon enough and will have to decide if work is back on the table or we dig into savings. I decided not to cash in retirement plans and investments which hurt my financial aid package and I do not qualify for state insurance for the kids. So there is a lot of give and take with finances for us non-traditional students with mortgages, and family obligations. I decided average grades were good enough and family life has to remain important and it is doable.....just 8 years of inadequate savings and mounting debt is kinda worrisome - I can retire when I am like 90 so I will be the old guy propped up in the corner treating you in the ER

But I look forward to school and love what I am doing (except around exam time )