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Investing with Student Loans-HELP!!!

Discussion in 'Allopathic Class Threads' started by airmosesi, Mar 23, 2007.

  1. airmosesi


    Dec 16, 2006
    OK, so I'm in a quandry as to whether I should use my student loans to invest. I'll just lay out the cards... I'm planning on going into family med in a rural setting, and I am reasonably sure that by working in an underserved location I can get my loans "forgiven" for a 3-4 year committment.
    In comparison to most of my classmates, I live very simply and housing is very cheap, which several thousand left over. My preference would be to invest it in a Roth IRA, to protect from taxes.
    1. Is it legal to use unsubsidized student loans to invest in a Roth IRA?
    2. Before entering a practice that offers loan forgiveness, would the account be audited (and would they be mad that they were paying off loans that I would have in a Roth)?
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  3. BigKurz

    BigKurz Member 2+ Year Member

    May 22, 2006
    I don't have any concrete information regarding this (as in, no references), but based on what has been tossed around on this board before, I believe it is ILLEGAL to use the money in the manner described. I hope others can confirm this, but I do know that the money--especially the gov't money--has very specific guidelines.

    The FinAid officer at UIC made it clear to me, for example, that loan money could NOT be used to make a car payment.

    Now, the question of "will they know" is much more pertinent--"living expenses" is a broad category.

    I had planned on living on the cheap and playing with the extra money. However, I later learned that budget increases (even to get to what is considered "average") requires documentation (ie..I have $650 allotted for rent. If i need more, I need to show them a lease).

    I just don't think its too feasible.
  4. sponge

    sponge Member 7+ Year Member

    Mar 7, 2006
    This is an odd question for this forum.. if any mods see it, can you move this to Financial Aid?

    Anyways, for a Roth IRA, or any IRA I believe, you would have have earned income. That is, you can't deposit more money into an IRA than you are making. However, if you are working the year before you go to school, you could invest the money that you made and that would have gone to rent, and the loan money could pay for rent and whatever living expenses. Same thing with any income during school or summer jobs. I don't know if fellowship money counts different as other earned income, nor do I know anything about auditing in regards to loan repayment programs.
  5. Twitch

    Twitch 7+ Year Member

    Jun 17, 2004
    unsub is at 6.8% currently. Unless you're locked in lower - forget about it. Leave the investing to wallstreet folks and focus on taking care of ppl.

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