Financial help

[hopefuldpt1234]

alright guys I have been doing tons of research, but I’m honesty just looking for some advice here.

I have 35k loans from undergrad and I’m starting PT school in a month. I’m on my own for all the expenses and tuition alone is 40k a year so looking at around 60k a year in loans if I live super frugally (not allowed to work during first year - plan on working like 10 hours a week the following years).

This is where my question comes in. I recently inherited ~50k from a family member. Do I use all of it on my first years expenses? Or do I spread it across all 3? Or do i pay off my undergrad loans? Also curious on if anyone thinks it’s worth it to use some of it to pay the interest on the loans I do have to take out.

I’d really appreciate some advice because I’m pretty overwhelmed by all of this.

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[DPTTELl]

That’s a good question. If your undergrad loans are subzidised I wouldn’t worry about paying it off right now and instead I would use that money to cover living expenses while on the PT program that way your grad debt would not be as high. Specially since you will most likely have to take on plus loans to cover for part of your tuition and your other expenses. Remember you don’t get subzidesed student loans for grad school so you’ll start generating interest of 7% as soon as you get your money disbursed.

 

[SATXDPT]

That’s a good question. If your undergrad loans are subzidised I wouldn’t worry about paying it off right now and instead I would use that money to cover living expenses while on the PT program that way your grad debt would not be as high. Specially since you will most likely have to take on plus loans to cover for part of your tuition and your other expenses. Remember you don’t get subzidesed student loans for grad school so you’ll start generating interest of 7% as soon as you get your money disbursed.

I agree, borrow only enough to cover tuition and use the cash for living expenses. If you are really careful, it might last you until graduation. I don't think you should pay off your undergrad loan or use it all up in the first year. Having the cash in savings will give you peace of mind.

 

[mlb_25]

It depends on a lot of factors. Like mentioned above, if your undergrad loans are subsidized I wouldn't bother paying them off now because you won't have to make any payments on them and they won't accrue any interest when you go back to school. If they're unsubsidized, I would compare the interest rates on your undergrad loans vs the loans you'll be pulling out for PT school. From my understanding you can borrow up to $20,500 at 6% each year and use grad plus loans at 7% to fill the rest of your CoA. So if the interest rates are lower on your undergrad loans than that, it might be better to use your money for grad school. It'll take some work on your part to calculate the total cost of paying off your different loans depending on what repayment plan you use. Either way, I recommend keeping some of it as cushion or as an emergency fund.