How does owning property affect financing med school?

[ferreed]

Howdy, all.

My wife and I are trying to plan and prepare ourselves for me to go to med school. My question is how does having savings and owning property affect the type of aid/loans we can get? She'll keep her job when I go to school, and we have some money in savings and a little more in retirement accounts. We live on a farm and rent out another investment property we own. My wife doesn't make enough money to pay for my schooling outright, but she can make ends meet at home while I'm in school. I'll appreciate any information or advice you folks can share.

Thanks!

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[k's mom]

Howdy, all.

My wife and I are trying to plan and prepare ourselves for me to go to med school. My question is how does having savings and owning property affect the type of aid/loans we can get? She'll keep her job when I go to school, and we have some money in savings and a little more in retirement accounts. We live on a farm and rent out another investment property we own. My wife doesn't make enough money to pay for my schooling outright, but she can make ends meet at home while I'm in school. I'll appreciate any information or advice you folks can share.

Thanks!

It depends on your age, among other things. After age 25 a certain amount of savings, equity, etc...are protected from being used in the FEDERAL formula. Also, your wife's income is not taken dollar for dollar. Only the income over and above a certain amount is considered "fair game" for the EFC. Also, keep in mind that the EFC can be altered by the financial aid personnel at your school (for example, they are the ones who have the power to alter your numbers because you had to report your previous year's income, which will obviously not be availabe when you are in med school.) However, I believe the type of 1040 you file makes a difference, too. Some friends of mine did a quit-claim deed on their house, so that the rental income went to his parents and they could qualify for medical benefits in his med-school state. This may be an option for you as well. Do a search of this forum for "federal formula" or "asset protection allowance". Someone gave a great link a few years back to the federal formula.

 

[MRAM]

you can claim a residential property without penalty, but when you have an extra property that brings in money you'll qualify for less loan money ( you could transfer that property into someone elses name as poster said before), also with savings you will qualify for less, with your retirement--it doesn't count against you for loans.....its not factored in because they don't expect you to break into it.......best financial advice is to pay off ALL consumer debt....minimize your assets ( be creative).....and work closely with the financial aid office (they can help you work out your budget depending on your particular circumstances ) Good luck!