How does my math look

[carolinablue]

So this is my situation.
I am splitting the cost of medical school with my parents. Don't ask why, this is just an agreement that we made and it is what it is.

My tuition is about 37k a year, so essentially I will be taking out loans for approx 75k.
I was thinking of just splitting the tuition each year by loan money, and by family money...but then i realized it would be smarter to just take family money to pay for my first two years, and use loan money to pay for the last two so i would be paying less interest.
But after doing some simple math, I realized that if i saved up my subsidized loan for the first two years, by my third year i would have (8.5x3=25,000$) in subsidized tuition money. I would have to use about 13k in unsubsidized loan money for my third year....and then my fourth year it would be normal mix of the two (8500 interest free, the rest being with interest loans).
So....in summary...with this plan, i will only have about 40-50k in unsubsidized loans that i need to pay back with interest. And I could start paying them back within my first year of pg1 so by then there wouldn't be as much interest added up as compared to using it three years earlier.
I have never taken a loan out for school before so I am very uneducated on the issue.

also, i really need help answering some basic questions that i have had difficulty finding answers to on the boards.

1. does my plan make sense, is it doable?

2. can i just save up my subsidized loans each year?

3. what can i use my subsidized loan money for? Instead of driving to campus and rotations with a car, I would like a used motorcycle which is about 3000-4000$. (i rode a sportbike through college and just prefer this method of transportation...i had to sell mine and cant afford one right now). I know that i shouldn't be spending money on things besides tuition but if there is one thing that will keep me sane between breaks its just riding on my bike..i dont party alot or spend money on stupid things, but it has always been my outlet..my stress reliever...but without having an income through med school i thought i would have to wait till residency. Dont flame me for wanting a bike, or using loan money to get one...its just a method of transportation for about 3000$...

4. could i put off paying the subsidized loans after residency and only pay back my unsubsidized loans first?


thank you guys..please dont flame me for asking this stuff..like i said, im not very knowledgeable on loans and finances

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[rbnsafsadgf]

The basic idea of what you want to do is fine. That is, you want to take out Sub loans each year and use some other money for everything else. You are very lucky. And it seems you must of been very lucky without fin aid in undergrad.

2) you can do what ever you want with the money. Technically your MPN says it must be spent on educational expenses only. Tuition, fees, books, rent, food, transportation, etc. There is no accounting other than the money goes through your school, so your tuition and fees will be paid first.

3) re: motorcycle. Sure do it. get good gear.

4) each loan has a minimum payment. but, yes, you can pre-pay extra towards the unsub'd ones. Also, check out IBR -- lower payment during residency, and the sub'd aspect continues for three years, so it might be good for you.

Read up about all the types of loans and make sure you understand what you are getting into.

 

[dpmd]

Not an unreasonable plan at all. Just make sure your parents pay the school directly and then you will be refunded the amount of subsidized loan you take out (if your parents give you the money ahead of time it may count against you in terms of need based aid).

 

[DrBowtie]

What are you doing for living expenses?

 

[carolinablue]

Not an unreasonable plan at all. Just make sure your parents pay the school directly and then you will be refunded the amount of subsidized loan you take out (if your parents give you the money ahead of time it may count against you in terms of need based aid).

so right i have no money in my personal account. I have already been approved for the student loans by the school, and i think i have to wait until classes start to actually get the loan money. I believe that on the first day of orientation, the loan is directly deposited towards the school's tuition.

 

[Long Way to Go]

You're spending $38,000 on living expenses? If you don't have to pay for a family, you should easily be able to cut that by anywhere from 40-70%, depending on where you live.

 

[The White Coat Investor]

I would definitely split up the family money to maximize the subsidized vs unsubsidized ratio.

If you need the transportation, the bike is reasonable. I used to want one, before I started working in the ED. If you don't need the transportation, I'd save the money.

Good luck. Good job on minimizing the debt. There is another thread out there right now with someone considering $350K in debt not that big a deal. $75K is manageable for a doc. $350K is not.