Financial Aid Question

[ImNotBritish]

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Hey everyone-

I'm starting school in the fall, and trying to make financial aid decisions. I am worried about not taking enough aid to cover all of my expenses. However, I also don't want to be extra in debt for money I didn't need if I accept too much. So, would it be possible to accept more loan money than I think I need, and then pay it back early to avoid getting charged a bunch of interest? For example, if I accept $20,000 for the first semester, and find I only spend $16,000, can I make an $8,000 payment after 2nd semester disbursement in order to only pay interest on that excess for the 4 months that I had it in the bank?

Hopefully that makes sense - thanks for any input you can provide!

 

[Neurocentric]

I don't know how your school works, but for me, I was able to get an estimate of how much the school would be charging me before I got my financial aid package, that way, I was able to figure out roughly how much I should accept (I needed to accept everything, however). You might want to contact the bursar's office of your school, as well as financial aid, to find out how all of that works. For me, I'd honestly use the extra money (if any) to buy books, or supplies for school. It wouldn't go to waste at all, especially if I was tight on money. That's just my opinion.

Sorry that I can't give you more information.

 

[DrBowtie]

Hey everyone-

I'm starting school in the fall, and trying to make financial aid decisions. I am worried about not taking enough aid to cover all of my expenses. However, I also don't want to be extra in debt for money I didn't need if I accept too much. So, would it be possible to accept more loan money than I think I need, and then pay it back early to avoid getting charged a bunch of interest? For example, if I accept $20,000 for the first semester, and find I only spend $16,000, can I make an $8,000 payment after 2nd semester disbursement in order to only pay interest on that excess for the 4 months that I had it in the bank?

Hopefully that makes sense - thanks for any input you can provide!

Did you pay any attention to your entrance loan counseling?
You can always send money back. If it is by a certain date the will even reimburse your default fee.

 

[ImNotBritish]

Yeah, my school has given us tuition information, and I've been keeping close track of my spending to know how much I'll need for rent, bills, food, etc. I'm still just paranoid I've forgotten some huge expense or something and I'll screw this all up somehow.

As for the entrance counseling, the med school has mandatory loan counseling that happens at orientation, which is obviously months after I have to submit the paperwork for how much I'll accept. Not terribly helpful, obviously. I called the financial aid office, but they said that they send "specially trained" reps to the med school orientation, and seemed hesitant to give me an appointment to get info before mid-August (they're more for undergrad, I guess?).

 

[The Enchanter]

Yeah, my school has given us tuition information, and I've been keeping close track of my spending to know how much I'll need for rent, bills, food, etc. I'm still just paranoid I've forgotten some huge expense or something and I'll screw this all up somehow.

Hmm, huge expense, huge expense... oh yeah, residency interviewing! I've heard that plenty of people spend upwards of $10k applying to and interviewing for residency programs. Your school will almost certainly not budget this money for you during your third year. I'm taking as much as I possibly can in loans and saving up because I don't happen to have $10k lying around. Either way, take the max amount your first year and if you reach the end of the year and have a pile of cash lying around you can always opt to return some.

 

[JJMrK]

Hmm, huge expense, huge expense... oh yeah, residency interviewing! I've heard that plenty of people spend upwards of $10k applying to and interviewing for residency programs. Your school will almost certainly not budget this money for you during your third year. I'm taking as much as I possibly can in loans and saving up because I don't happen to have $10k lying around. Either way, take the max amount your first year and if you reach the end of the year and have a pile of cash lying around you can always opt to return some.

That doesn't sound like the best idea for a couple of reasons:

1) Your school should provide you with a budget estimate that will tell you if they include these costs in your COA for 4th year (the schools where I interviewed do include these costs).
2) You are going to pay 7% in interest on the money you're just going to sit on. Even if you put it in a savings account with a 0.5% interest rate, you're essentially just handing over 6.5% interest on money you haven't even spent.

 

[faw20]

I wouldn't worry about hoarding money for residency interviews. You can take out private loans for this if you don't have enough money saved or your school doesn't include this exorbitant cost in your 4th year financial aid package. They're called Residency and Relocation Loans. Sallie Mae and Graduate Leverage have them (possibly others too, but these I know for sure).

 

[ShinyDome19]

Did you pay any attention to your entrance loan counseling?
You can always send money back. If it is by a certain date the will even reimburse your default fee.

👍+

Seriously people...your going to be taking out in excess of 150K in loans...this is a lot of money..READ EVERYTHING YOU SIGN. It is well stated in your Master Promisary Note and throughout the little FASFA Entrence Exam that you can return any money that is not used...

 

[ThaliaNox]

Folks... Even if you don't accept your full loans at the beginning of the year, you can change your mind later. At least at my school, if I am eligible for 20,000, and I only take 15, then if in November I total my car, I can get the exra 5.

My school also does not budget interviewing expenses for forth year. Check if your school does. I certainly wouldn't recommend private loans for this expense.

 

[ImNotBritish]

👍+

Seriously people...your going to be taking out in excess of 150K in loans...this is a lot of money..READ EVERYTHING YOU SIGN. It is well stated in your Master Promisary Note and throughout the little FASFA Entrence Exam that you can return any money that is not used...

🙄 Hence why I'm seeking out the information now, before I've made any final decisions and before I've signed anything. I knew that they would not refuse if I tried to return the money; I was more wondering how the interest charges would work at that point, and if there were penalties for repaying in advance.

Thanks for the advice, everyone.