Ideal loan set up?

[Jgrobi17]

So.. All the excitement of applying, looking at different schools, comparing the bells and whistles of each and finally getting accepted and putting down my deposits is now over. It is indeed time to start looking at the ugly part of it all- loans.

My question is - Assuming no HPSP or NHSC (AKA pure loans to pay for school) what is the ideal loan set up scenario? I have absolutely no background and I would just like to get a feel what what people are actually doing or what people have done in the past to pay for school. For those who have already been in school for a while on a 100% loan basis what would you do differently now that you have seen how your other classmates did it? Is there any huge and obvious type of "deal" I should avoid? Some "deal" I should try to get?

Thank you guys in advance for all your helpful responses 🙂

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[MRZ8]

Everyone who takes out loans should respond to this. I'll be a D1 in Aug. This is my basic understanding:
For low-income students, I think subsidized loans (you pay no interest) or grace-period-loans (interest accumulates not after disbursement, but after graduation) are available. Someone confirm this.
Ideally, you get these if you're eligible. If more loans are needed to pay for cost of attendance, then search for those with the lowest interests.
I hear about "consolidation of loans," where loans are combined for a lower interest rate. I don't know how this works and who's eligible.

When do we apply for loans? After the dental school, given FAFSA info, determines our eligibility for aid and need-based loans?

 

[whaleofatale]

Everyone who takes out loans should respond to this. I'll be a D1 in Aug. This is my basic understanding:
For low-income students, I think subsidized loans (you pay no interest) or grace-period-loans (interest accumulates not after disbursement, but after graduation) are available. Someone confirm this.
Ideally, you get these if you're eligible. If more loans are needed to pay for cost of attendance, then search for those with the lowest interests.
I hear about "consolidation of loans," where loans are combined for a lower interest rate. I don't know how this works and who's eligible.

When do we apply for loans? After the dental school, given FAFSA info, determines our eligibility for aid and need-based loans?

For federal student loans (which make up the bulk of aid packages), only Direct Unsubsidized and Direct Grad PLUS Loans are available. Both of these loans begin accruing interest immediately, though for both you do not begin making payments on interest or principal until 6-months post-graduation. The Direct Subsidized Loan is NOT available for graduate students.

Your school may participate in the Health Professions Student Loan Program, which provides low-interest (5%) loans to low-income students. This loan does not accrue interest during school or for 12 months thereafter. Your school may also offer low-interest institutional loans as well.

All schools have different financial aid application deadlines. Now is the time to begin applying for the 2016-2017 academic year. At the very least you will need to complete a FAFSA, but check with your school re: other requirements and deadlines.

 

[MRZ8]

For federal student loans (which make up the bulk of aid packages), only Direct Unsubsidized and Direct Grad PLUS Loans are available. Both of these loans begin accruing interest immediately, though for both you do not begin making payments on interest or principal until 6-months post-graduation. The Direct Subsidized Loan is NOT available for graduate students.

Your school may participate in the Health Professions Student Loan Program, which provides low-interest (5%) loans to low-income students. This loan does not accrue interest during school or for 12 months thereafter. Your school may also offer low-interest institutional loans as well.

All schools have different financial aid application deadlines. Now is the time to begin applying for the 2016-2017 academic year. At the very least you will need to complete a FAFSA, but check with your school re: other requirements and deadlines.

Thanks for clarifying. Are there any other loans, besides the HPSL, that start accruing interest after graduation instead of after disbursement?

EDIT:
Need-based Federal Loans
Federal Perkins Loan
Federally subsidized Perkins loans are awarded to students who demonstrate exceptionally high need and are citizens or permanent residents of the United States. This loan carries a 5% interest rate upon repayment. Maximum aggregate eligibility is $30,000, including undergraduate borrowing. Repayment begins nine months after graduation with ten years to repay. Eligibility is assessed when all financial aid documents are submitted.

Health Professions Loan (HPL)
Federally subsidized Health Professions Loans are awarded to students who demonstrate exceptionally high need and are citizens or permanent residents of the United States. This loan carries a 5% interest rate upon repayment, and repayment begins 12 months after graduation with ten years to repay. Parental information is mandatory for eligibility. Eligibility is assessed when all completed financial aid documents are submitted. Don’t forget to review the information in our general scholarships section for additional information on scholarship opportunities, government resources and loan forgiveness programs.

- See more at: http://www.dental.upenn.edu/academi...government_financial_aid#sthash.8ShMZFES.dpuf

 

[MRZ8]

Your school may participate in the Health Professions Student Loan Program, which provides low-interest (5%) loans to low-income students. This loan does not accrue interest during school or for 12 months thereafter. Your school may also offer low-interest institutional loans as well.

Would you know how the HPSL loan amount is determined?
This HRSA link states, "previously, the maximum loan amount was tuition plus $2,500." (pg 25). What is that, currently?
http://bhpr.hrsa.gov/scholarshipsloans/tools/guidelines/hpsl.pdf

 

[whaleofatale]

Thanks for clarifying. Are there any other loans, besides the HPSL, that start accruing interest after graduation instead of after disbursement?

EDIT:
Need-based Federal Loans
Federal Perkins Loan
Federally subsidized Perkins loans are awarded to students who demonstrate exceptionally high need and are citizens or permanent residents of the United States. This loan carries a 5% interest rate upon repayment. Maximum aggregate eligibility is $30,000, including undergraduate borrowing. Repayment begins nine months after graduation with ten years to repay. Eligibility is assessed when all financial aid documents are submitted.

Health Professions Loan (HPL)
Federally subsidized Health Professions Loans are awarded to students who demonstrate exceptionally high need and are citizens or permanent residents of the United States. This loan carries a 5% interest rate upon repayment, and repayment begins 12 months after graduation with ten years to repay. Parental information is mandatory for eligibility. Eligibility is assessed when all completed financial aid documents are submitted. Don’t forget to review the information in our general scholarships section for additional information on scholarship opportunities, government resources and loan forgiveness programs.

- See more at: http://www.dental.upenn.edu/academi...government_financial_aid#sthash.8ShMZFES.dpuf

The Federal Perkins Loan has been discontinued by Congress, with a one-year extension. New students are unlikely to be awarded the Perkins Loan going forward.

 

[whaleofatale]

Would you know how the HPSL loan amount is determined?
This HRSA link states, "previously, the maximum loan amount was tuition plus $2,500." (pg 25). What is that, currently?
http://bhpr.hrsa.gov/scholarshipsloans/tools/guidelines/hpsl.pdf

Your school determines the amount that will be awarded annually in HPSL.

 

[whaleofatale]

Thanks for clarifying. Are there any other loans, besides the HPSL, that start accruing interest after graduation instead of after disbursement?

EDIT:
Need-based Federal Loans
Federal Perkins Loan
Federally subsidized Perkins loans are awarded to students who demonstrate exceptionally high need and are citizens or permanent residents of the United States. This loan carries a 5% interest rate upon repayment. Maximum aggregate eligibility is $30,000, including undergraduate borrowing. Repayment begins nine months after graduation with ten years to repay. Eligibility is assessed when all financial aid documents are submitted.

Health Professions Loan (HPL)
Federally subsidized Health Professions Loans are awarded to students who demonstrate exceptionally high need and are citizens or permanent residents of the United States. This loan carries a 5% interest rate upon repayment, and repayment begins 12 months after graduation with ten years to repay. Parental information is mandatory for eligibility. Eligibility is assessed when all completed financial aid documents are submitted. Don’t forget to review the information in our general scholarships section for additional information on scholarship opportunities, government resources and loan forgiveness programs.

- See more at: http://www.dental.upenn.edu/academi...government_financial_aid#sthash.8ShMZFES.dpuf

The HPL/HPSL are the same thing.

 

[Faux]

Would you know how the HPSL loan amount is determined?
This HRSA link states, "previously, the maximum loan amount was tuition plus $2,500." (pg 25). What is that, currently?
http://bhpr.hrsa.gov/scholarshipsloans/tools/guidelines/hpsl.pdf

my state school(UB) gave me 11k for the year.

 

[ghtdrier]

Good,Repayment begins nine months after graduation with ten years to repay. Eligibility is assessed when all financial aid documents are submitted.

 

[longhornpride]

I graduated 2 years ago so I'm not sure if anything has changed as far as the types of loans that are distributed. I went to a private school for dental school so I had to take out quite a bit. I believe they stopped giving out subsidized loans a few years ago so unfortunately interest will start right away with any loan you take out. Direct loans are capped at a certain amount, I can't remember exactly what it was but let's just assume its 40k-50k a year. Anything more than that, you'll need take out a Gradplus loan which is usually a higher interest rate. I was offered direct subsidized federal loans my first 2 years but after that I had to take out unsubsidized direct, gradplus, and also accepted a loan from my school at 5% which I believe someone mentioned above. After you graduate, focus on getting a great job and try to get income coming in as soon as you can. you can basically pay off as much principal in those first 6 months before your payments kick in. You cannot pay off principal if you have an interest balance (which you will) after the 6 months have passed. Once you've worked for a year and can show good income and have good credit, I would consolidate and refinance your loans. Basically, you'll switch to a private lender like SoFi or DRBank and they will give you a much lower interest rate. I was at fixed 6.8 % for federal and 7.9 % for grad plus loans initially and switched to 4.5 % fixed with DRB on a 10 year note. It makes it one ease payment when you consolidate rather than making 3-4 payments a month through different lenders. You can get rates even lower than that if you select a 5 year payment or a variable rate.

For now, just focus on living below your budget and share your living costs with roommates if you can. Focus on boards and graduating on time. You can worry about loans and paying them back after you graduate. They give you plenty of options from income based repayment to 25, 10, 5 year notes. Just do your research on IBR. Many people think the remainder will be forgiven after 20 years but just remember... any income that is forgiven will be taxed and added to your income. Meaning it could push you to an even higher tax bracket when that time comes.