financial aid question..

[whiteorgo]

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so i'm kind of lost on the whole financial stuff, so I was hoping people would give me some info on how to go about this thing

So I applied for financial aid, and I will receive my award letter soon, and how much am I supposed to accept? do I borrow tuition + rent + how much I plan on spending? or is it just people's preference?

And I know stafford loans are limited, so after that, do most student borrow from Grad PLUS loans? or should I look into private loans?

Thanks alot!

 

[organdonor]

so i'm kind of lost on the whole financial stuff, so I was hoping people would give me some info on how to go about this thing

So I applied for financial aid, and I will receive my award letter soon, and how much am I supposed to accept? do I borrow tuition + rent + how much I plan on spending? or is it just people's preference?

And I know stafford loans are limited, so after that, do most student borrow from Grad PLUS loans? or should I look into private loans?

Thanks alot!

Accept as much as you need. You need to look up your schools advertised COA (cost of attendance). This is a formula they use that includes tuition, travel, books, fees, estimated living expenses, etc. Most (all?) schools allow for fairly generous amounts. You might remember your EFC (estimated family contribution) from your FAFSA.

The maximum amount of loans you will be able to borrow is COA minus EFC or any other financial aid.

I've got a couple different ways to look at things, with some savings in the bank and a wife with an income. I asked my financial aid advisor what I should do and she pretty much said borrow as much I could. She thought that my goal of keeping my debt, and therefore interest, low was " admirable, but not rational."

I figure she knows more than I do, so bring on the loans! Even so, with my EFC I'm going to pay a pretty good amount out of pocket.

The curious thing is that the more money I have in the bank the higher my EFC and hence the less loans I can take out. Therefore if I blow my money on a sweet ride I won't have as high of an EFC and will be able to borrow more. Either way my savings will be wiped out in a couple years anyway and one option leaves me something to show for it

 

[TooMuchResearch]

Accept as much as you need. You need to look up your schools advertised COA (cost of attendance). This is a formula they use that includes tuition, travel, books, fees, estimated living expenses, etc. Most (all?) schools allow for fairly generous amounts. You might remember your EFC (estimated family contribution) from your FAFSA.

The maximum amount of loans you will be able to borrow is COA minus EFC or any other financial aid.

I've got a couple different ways to look at things, with some savings in the bank and a wife with an income. I asked my financial aid advisor what I should do and she pretty much said borrow as much I could. She thought that my goal of keeping my debt, and therefore interest, low was " admirable, but not rational."

I figure she knows more than I do, so bring on the loans! Even so, with my EFC I'm going to pay a pretty good amount out of pocket.

The curious thing is that the more money I have in the bank the higher my EFC and hence the less loans I can take out. Therefore if I blow my money on a sweet ride I won't have as high of an EFC and will be able to borrow more. Either way my savings will be wiped out in a couple years anyway and one option leaves me something to show for it

The financial aid officer suggested that paying an extra 6.8% annually was the best idea?

 

[TexasMDtobe]

From the FAFSA website, the stafford loans are made directly to you (both subsidized and unsubsidized) while the Grad PLUS loans are made to your parents. Private loans are available (with your fin aid office as the middleman) if you need still more money to cover your costs.

Ideally, you want to borrow as little as possible. Make a plausible budget for your 12 months (as opposed to the school's calculated Cost of Attendance which usually only accounts for the 10 months you are in school) and borrow that amount. Stick to your budget. Next spring, see whether you borrowed too little or too much and adjust your borrowing for the next year.

Everything you borrow excepting the subsidized stafford loan accrues interest constantly, so borrow wisely and spend little - seven years of interest (assuming 3 year residency) adds up quickly. Borrow too much and you'll be kicking yourself down the road.

 

[link2swim06]

Accept as much as you need. You need to look up your schools advertised COA (cost of attendance). This is a formula they use that includes tuition, travel, books, fees, estimated living expenses, etc. Most (all?) schools allow for fairly generous amounts. You might remember your EFC (estimated family contribution) from your FAFSA.

The maximum amount of loans you will be able to borrow is COA minus EFC or any other financial aid.

I've got a couple different ways to look at things, with some savings in the bank and a wife with an income. I asked my financial aid advisor what I should do and she pretty much said borrow as much I could. She thought that my goal of keeping my debt, and therefore interest, low was " admirable, but not rational."

I figure she knows more than I do, so bring on the loans! Even so, with my EFC I'm going to pay a pretty good amount out of pocket.

The curious thing is that the more money I have in the bank the higher my EFC and hence the less loans I can take out. Therefore if I blow my money on a sweet ride I won't have as high of an EFC and will be able to borrow more. Either way my savings will be wiped out in a couple years anyway and one option leaves me something to show for it

That is crazy advice, 6.8% is a not a very good interest, and since we can no longer consolidate, I would say take as little as possible.

OP, three types of loans

Subsidized Loans - 6.8% no interest until after med school (best) up to 8,500 a year

Unsubsidized loans - 6.8% interest from the day you take the loan (not great)

Grad Plus (avoid these if possible, higher interest)

Remember every dollar you take out your will be pay back at least $1.5 in interest.

So graduate with:
100K....pay 150K total
200K...pay 330K total etc.

And remember you lose an opportunity to invest while paying interest.

Therefore taking an extra 10K when in med school could potential add up to a lifetime lost of 60K (interest + loss of investment opportunity)

 

[whiteorgo]

so then, say my tuition is around 50-60 k. Even if i take out sub and unsub stafford loans, it'll still not be able to cover it all (from my knowledge, i might be wrong). Then what am i supposed to turn to? other than scholarships, grants, and outside help (which i dont really have), i'm supposed to turn to Grad PLUS? is my understanding correct?

 

[johncalvin]

Can you borrow "less" than you need...then when you run out by, say, March, you can go back to receive the rest of your COA?

This way interest wouldn't accrue on the 2nd wave of borrowing until March (preferably, don't use GRAD Plus until March)...

Am I missing something here?

 

[link2swim06]

whiteorgo: Yes you would need grad plus if you used out the others, I am guessing many people use them, but the math says they will cost you a good amount more than subsidized loans.

johncalvin: I remember a financial counselor at one of my interviewing spots say that you can increase your aid amount...although u get aid every semester (i was told), not per year so I think your savings would be less than a $100 by delaying interest, in other words not worth the hassle.