Loan stress

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BurgerEater

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Ok, I am now officially stressed about getting loans. I got my credit report back and there is a nasty blemish on it. In '99 I took a semester off, and went travelling. I forgot that if you are out of school for 8 months the bank starts taking money out of your account for your student loan payments. I had closed that account, and was out of the country (Europe). When I got back home for Christmas there were some angry letters from the bank my parents had saved for me. So I had missed 3 student loan payments. I got it cleared up and payed it immediately, and have had more since, but that is on my statement.

Will this be a big problem for me getting loans? Will I get Staffords OK? And the others?

Is it OK to wait until you get an acceptance to apply for financial aid, or should I get on it now?

Thanks for any replies :(

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First of all, it depends on whether or not you NEED "private" loans. If you end up going to a state school (just about ANY state school anywhere) the Federal Stafford loans should be more than adequate to cover your school budget (including tuition, housing, etc). You can get up to $38,500 a year from the Feds. The only way you WOULDN'T qualify for that money is if you "defaulted" on your previous loans, which it doesn't sound like you did. Missing payments isn't great, but as long as you've taken care of the past-due amounts, you should be in good standing to get more money.

Now if you're planning on going to a private school whose budget would be more than the $38,500 (and remember, you can still borrow ALL of that from the Feds) you will need to make up the difference in private loans. In other words, if the private school's budget is $45,000, you will need to "find" $6500 somewhere...whether that's through private loans, parents, savings, or whatever.

Most private loan companies aren't going to approve YOU (alone) anyway, regardless of your credit history, because you won't have an income while in med-school. Most companies require a co-signer for their loans even if you have an immaculate credit history (unless you can prove you have a monthly income sufficient to cover a loan payment, housing, etc...i.e. a trust fund, savings). Now, if your credit is REALLY bad, they probably would reject you outright (regardless of co-signers) but a couple of missed payments will probably just put you in the mandatory co-signer group.

Hope this helps...
 
Where did you check your credit status?
I need to do that. I think I might have a few bad cookies in my batch :(
 
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so let me just get this straight... the fed's approve you for the loans no matter what your credit history is, as long as your other stafford loans are in good standing? b/c my credit is abominable...
 
Yes, the feds approve you for your loans "no matter what" as long as your STUDENT LOANS (and any tax debt) are in good standing. Basically, as long as you aren't "defaulted" (not just late..defaulted usually means 6+ months past due) on your student loans, don't owe any back taxes or child support, you're good to go with the Stafford Loans....and of course, you don't need a co-signer for federal money.

Oh yeah, for those of you that might be defaulted or late on student loans, as long as you've made arrangements and paid ON TIME for six months, you can still get NEW student loans. If you were only late once or twice, or if you've paid all the past due amounts, there shouldn't be any problem at all (or need for the 6-month "re-establishment" period). The feds are pretty lenient actually...a lot more so than "private" lenders. The key with federal loans is to keep them INFORMED! If you can't pay you're loans, just call them up (or go on-line) and it's quite easy to get deferments and/or forbearances on your loans.

One last thing, you should start processing your financial aid data (FAFSA) as SOON as you get your W2's (and your parent's) in January/February...even if you haven't been accepted ANYWHERE (or haven't decided which school you'll attend). All you do is name the "anticipated" schools on your FAFSA and the info will be sent to them. The FAFSA only has room for 6 schools, so you'll want to try to narrow down your list (assuming you applied to more than 6 schools), but even if you end up accepting at a school that you didn't "originally" list, it's quite easy to add them in at a later date (FAFSA is MUCH more efficient than AMCAS!)

Remember, most schools award scholarships/grants/low-interest "house" loans on a first-come-first-serve basis, so it's in your best interest to get your info to every school you can, as SOON as you can! That way, when you DO get accepted, they can immediately start processing your financial aid. Many students make the mistake of waiting to find out EXACTLY where they'll be going before they transmit their FAFSA...and they lose out on a lot of "free" money. Not to mention that if you wait til the last minute, there's a good chance that your aid won't be processed BEFORE school starts...which means you could receive your aid weeks (if not months) after classes begin (I still have classmates that heaven't received their aid, and we've been in class since the middle of August!) Makes it kinda hard to pay the rent....
;)
 
Also remember, and I can't stress this enough, you MUST minimize the amount you borrow to what is absolutely crucial. Loan repayment is no fun, even for a physician. And though there is $38,500 available per year, you really don't want to get into the unsubsidized loans if you can help it.

Medicine isn't the financial guarantee it once was, and it gets worse every year. Plan to borrow the very least you can.
 
hi guys...ok, im really scared of loans as well...so i will have about $20,000 worth of loans after undergrad...and thats even before med school...is this way too much?

i feel all this pressure to go to my state med school because people say you'll have to borrow less. but i was under the impression that med schools work like college- they give need-based scholarships and grants in your package...

for instance, my college costs around $35,000 a year, but i have scholarship for a large portion of that amount...do med schools give grants/ scholarship money, or is most of the aid in the form of loans??

what med schools are known for giving good scholarships? thanks everyone...
 
What private places do you recommend for loans? Is there a particular bank that you could suggest? I'm sure I'll be taking the full $38,500. And you know and I know, most private schools cost over $45,000. Where in particular do you suggest I look? Someone mentions "private loans"--where? Also, where do you request your credit report?
 
Originally posted by ScoobyDoo:
•Where did you check your credit status?
I need to do that. I think I might have a few bad cookies in my batch :(

I've had to check my credit report several times b/c I worked for 8 years after college. There are three companies that best known for credit reports--TRW, Experian, & Equifax. Type them in your favorite search engine & you can request a hard copy of your credit report or an online copy from their website. The report usually costs $8.50 or so.

If this is your first time checking your credit report, I would recommend Experian (www.experian.com) which last time I checked (about three months ago) had the most user-friendly format. Most financial planners recommend that you check ALL three credit reports, b/c they sometimes do not have all the info. However, I don't think that's particularly imp't unless you've had several years of full time work & credit.

Hope this helps...if you have specific ?'s you can email me.
 
DNALadder...just do a search for "medical school loans" on your favorite search engine (you can also search SDN since there's been several posts on this topic in the past!).

You need to know that no matter what school you go to, you can only borrow up to the amount that the SCHOOL budgets for you. If the school's budget is $35,000 a year...that's ALL you can borrow FROM ANY SOURCE (unless that source is a rich relative! ;)). If the school says tuition is $25,000 out of that $35,000, you better learn how to live cheap FAST! This is the reason we medical students are still BROKE despite being able to "technically" borrow up to $38,500 a year from the feds!!! It's also the reason most med-students still have multiple roommates....

And no, car payments (or credit card payments) are NOT counted in most school budgets...they might allow a "maintanence/fuel" budget, but rarely, if ever a "car payment" budget. Now's definitely no the time to be getting that new 'vette you've been eye-balling! :D

For the poster that asked if $20,000 was "too much" undergrad debt, well, you're in the same boat a LOT of us are. Yes, it is a lot of debt (but nothing compared to my $46,00 UG debt!) but it's just something you're going to have to suck-up for now and deal with once you start residency! If you CAN borrow less money, you should, but for a lot of us, borrowing it ALL is the only way to make it by! If you're really concerned about the debt-load, you should look into military and/or rural family practice scholarships. Many of these scholarships (especially military) will handle ALL of your med-school debt for a few years service (in the military or in an "underserved" area.
 
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