How exactly do students afford living expenses in high cost of living areas?

[OldRedditGuy]

Good morning, everyone!

So, I'm new to the SDN website, and I've been searching around the forums this morning. I know this question has been asked several times, but I wanted to ask it myself seeing as I'll be in a particular situation. This is all started after the topic came up in a discussion that began in my first post to SDN yesterday. I'll be attending medical school soon (pending I get an acceptance of course), and I was just wondering how exactly do students afford to pay living expenses while attending med school in areas like Boston, LA, or New York where the cost of living is insanely high? Obviously, I know they take out loans, but I'm wondering if you could possibly give me some nitty gritty details regarding this. Do you they just take out nothing but loans to pay off everything from rent to food to the car payments, etc etc on top of the school tuition? If so, do they all use federal loans? What if someone has bad credit; are there options for them aside from private loans to get the job down (this question is from sheer curiosity)? If one takes out the max Direct Stafford loan per year, can they also take out the Direct Graduate Plus loan?

The reason I ask so many questions is, for one, I am admittedly a bit ignorant on the financial aid aspects of medical school, and I will be applying to places like Harvard, Columbia, and Stanford where costs of living are nuts (though, getting in first is even nuttier haha). I have a wife and we are having a kid soon as well. Would we be able to afford it with none of us being able to work due to school and child?

I apologize for the life story and long essay lol. Any information you can give would be awesome!

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[ohmanwaddup]

People live off loans. Some schools in cities offer subsidized housing as well. idk if your wife is already pregnant but maybe not have a kid right now? or apply to places near family that can help take care of the kids?

 

[hannahrenee]

Schools have the cost of attendance listed on their websites. Those budgets included how much you can take out in loans for living expenses. My school budgets for about $2300 a month (In the midwest). You'll only get 9 months of of their estimated living expenses for first and second year if you have a traditional school schedule. And yes we take out grad plus loans after maxing the direct Stafford

 

[wanderingorion]

Good morning, everyone!..

Anything that isn't covered by the Stafford is covered by the Grad Plus. Trust me.

My wife and I just had our first child, so we are in a similar boat. Luckily, if your wife is working, you can cover most of your baseline expenses. Unfortunately, as a family of 3, you're likely not able to decrease your COL by having roommates, etc. Especialllllly with child care costs coming down the pipe =(((((.

You'll just have to take out more loans to cover the increased COL in those expensive areas, that's just the way it is. Even single students, living with 3+ roomies, still live like paupers with the stipends that the schools provide.

My advice is, try not to obsess about the debt. Try to minimize it as much as you can, within reason, but remember that things will come up. You will have medical bills from the birth. You will have daycare to pay for. And other random things that most of your classmates don't have to worry about. It's just part of the process.

 

[themoonman2]

Find cheap housing and budget as best as possible. I'm paying for all my school with loans and it has been fine- I don't live like a king but I'm not struggling to live. I have some classmates that have amazingly been able to work during school, but they're the minority. Find ways to save money like biking instead of driving or using public transport. Cook all your meals instead eating out. Minimizing spending on unnecessary things like cable tv, shopping, expensive vacations etc. I'm sure having a kid changes things, but I have multiple classmates that have had children during school, so people do make it work.

 

[Snoopy2006]

Good advice above. The Grad Plus loans will help you make up the difference for what you need. My understanding is if you haven't had any major red flags like bankruptcies, you shouldn't have problems getting a Plus loan.

From a purely financial perspective, ignoring debt at the medical student stage is probably one of the biggest mistakes physicians make. It's probably the most common mistake (almost everyone does it, including me). I've talked to countless young attendings who wish they'd given it more careful thought back when they were at your stage.

Don't get me wrong - if Columbia or Stanford accept you and your alternative is a lower-ranked school lacking many subspecialty residency programs - you take the acceptance and suck it up, realizing that you're probably going to be stuck "living like a resident" for a decent amount of time after residency to get out from under your debt. Med school name does influence match results (depending on your field), as much as some people like to pretend otherwise. If you end up at a small school without plastics, neurosurgery, ophtho, and ENT programs, you're going to face a much tougher battle to get into those fields. And if you're applying to a small subspecialty field, having a well-known name or two vouch for you from your home department will carry you in the Match - so I understand the appeal of wanting to go to a big name school.

On the flip side, I have classmates who were priced out of certain low-paying specialties because of their massive student loan burden. It's easy to borrow play money now, but your massive loans will continue to accumulate interest and grow during residency. There are ways out of massive debt - the Public Loan Forgiveness program, if it's still around then; the military, which doesn't apply in your case - so I wouldn't make your decision solely based off money, but I think it's a mistake to rack up over half a million in debt and then assume you'll be able to easily pay it back with a stay at home spouse and (potentially) multiple children by the time you finish residency. That will be the point in your life you want to buy a house, take fancy vacations, and spend a little, and instead many attendings end up living like residents for 5-10+ years trying to get out from under their loans.

Never too early to start familiarizing yourself with this gem of a website:

8 Financial Tips for Medical Students | The White Coat Investor - Investing And Personal Finance for Doctors

I disagree with certain things in that article. As I noted above, certain medical schools will open up more doors to you specialty-wise, and if you end up wanting to do a very competitive small specialty, you're better off making connections at a well-known department. But the general gist is correct - money and debt should be a factor in your final decision, and it's one that I think too many people ignore.

 

[Calizboosted76]

Anything that isn't covered by the Stafford is covered by the Grad Plus. Trust me.

My wife and I just had our first child, so we are in a similar boat. Luckily, if your wife is working, you can cover most of your baseline expenses. Unfortunately, as a family of 3, you're likely not able to decrease your COL by having roommates, etc. Especialllllly with child care costs coming down the pipe =(((((.

You'll just have to take out more loans to cover the increased COL in those expensive areas, that's just the way it is. Even single students, living with 3+ roomies, still live like paupers with the stipends that the schools provide.

My advice is, try not to obsess about the debt. Try to minimize it as much as you can, within reason, but remember that things will come up. You will have medical bills from the birth. You will have daycare to pay for. And other random things that most of your classmates don't have to worry about. It's just part of the process.

What was the credit score cutoff for gradplus?

 

[premed0108]

What was the credit score cutoff for gradplus?

I'm actually pretty sure the credit check doesn't actually look for a specific score cutoff. Rather, it's to check for things like bankruptcy, defaulting on loans, etc. I believe when I applied the thing that I had to sign consent to the credit check mentioned the specific things they werelooking for and it was not a true "credit check" in the way we normally use that term.

 

[DubbiDoctor]

Schools in areas with high costs of living list higher estimates for cost of attendance, allowing their students to take out more in federal loans to cover the increased costs. You can google the COA of schools in Manhattan or LA versus those in BFE.

 

[WedgeDawg]

Columbia specifically also doesn’t do loans anymore, only grants, because they just got a 7 trillion dollar donation or something, so that should help there (as well as being located in one of the lowest cost neighborhoods in manhattan). Can’t speak for the others.

 

[Treebeard]

1) Huge gradplus loans

Or, and honestly probably more commonly:

2) Dr. Mommy and/or Daddy pay up

 

[Calizboosted76]

I'm actually pretty sure the credit check doesn't actually look for a specific score cutoff. Rather, it's to check for things like bankruptcy, defaulting on loans, etc. I believe when I applied the thing that I had to sign consent to the credit check mentioned the specific things they werelooking for and it was not a true "credit check" in the way we normally use that term.

So like if I default on my car loan I won’t be eligible for gradplus? Also if I am not eligible for gradplus after defaulting are there other loan opportunities that do not rely on credit or credit history?

 

[OldRedditGuy]

So like if I default on my car loan I won’t be eligible for gradplus? Also if I am not eligible for gradplus after defaulting are there other loan opportunities that do not rely on credit or credit history?

Correct. Under the current rules, “adverse credit history” means that as of the date of the credit report, the PLUS loan applicant–

(1) Is 90 or more days delinquent on any debt; or

(2) Has been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a debt under title IV of the Act during the five years preceding the date of the credit report.

You can find all of this information on the financial aid websites, but you have to dig a little bit.

Outside of these 2 federal loans, I do not know of any that do not run credit checks. If I wrong, perhaps someone here can correct me.

 

[Calizboosted76]

Correct. Under the current rules, “adverse credit history” means that as of the date of the credit report, the PLUS loan applicant–

(1) Is 90 or more days delinquent on any debt; or

(2) Has been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a debt under title IV of the Act during the five years preceding the date of the credit report.

You can find all of this information on the financial aid websites, but you have to dig a little bit.

Outside of these 2 federal loans, I do not know of any that do not run credit checks. If I wrong, perhaps someone here can correct me.

Okay so when you say is delinquent on any debt, I have a credit card and medical bills that are closed due and I still owe on. Will these affect me as well?

 

[wonder12]

Okay so when you say is delinquent on any debt, I have a credit card and medical bills that are closed due and I still owe on. Will these affect me as well?

Best thing you can do is order a full credit report on yourself.

 

[OldRedditGuy]

Columbia specifically also doesn’t do loans anymore, only grants, because they just got a 7 trillion dollar donation or something, so that should help there (as well as being located in one of the lowest cost neighborhoods in manhattan). Can’t speak for the others.

Wait, Columbia is debt free now?! That just shot them up near the top of my list! Lol