Loans don't cover all of my tuition

[spazz911]

Hey all--

So the school where I've been accepted offers about 42k/year in unsub. loans. Tuition alone costs 55k. I really don't want to take out any PLUS loans for obvious reasons...

Is this the same for everyone else? Is most everyone resorting to the PLUS loan to get additional money for tuition and living expenses?

It was my impression that most students could cover their expenses using unsub. loans alone, which are bad enough. Now I have to resort to the PLUS loan... oh mercy mercy me.

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[member 20]

everyone (okay not everyone but definitely MOST) i know have taken out plus loans so i'd say it's pretty common

 

[rodmichael82]

I have taken out grad plus loans every year. I don't know what the big deal is?

 

[Etorphine]

Lenders make a killing off of these 8.0% loans, with pretty good returns that are basically guaranteed. I know at my school, they force us to take out disability insurance in case we become injured and cannot pay; in this case, the lender still gets paid. It is also not possible to default on these loans and declare bankruptcy. Welcome to modern day indenture, take your place in line.

 

[TJ40]

Maybe you can answer this. How long does it take to get a Grad Plus loan. Not sure if I need one yet. I have a "full ride for tuition, fees, and expenses" but do not have any paperwork as to weather that includes housing...no credit, no loans ever, and of course no money. So I am thinking to be safe I should apply for something. I just accepted the offer at Hopkins on Friday so have not received my package yet.
Nervous..yup

 

[pathologyDO]

My tuition/living expenses will exceed the max unsubsidized stafford loan amount. I will be taking out gradplus loans to cover the extra... what makes you think that private loans will be a better option? If you are financially savvy you might be able to find a slightly better deal, but for me, the simplicity and safety of the gradplus is worth it. Don't forget - if you want to consolidate your loans and/or apply for PSLF, you must have taken out federal loans.

 

[Spinach Dip]

Lenders make a killing off of these 8.0% loans, with pretty good returns that are basically guaranteed. I know at my school, they force us to take out disability insurance in case we become injured and cannot pay; in this case, the lender still gets paid. It is also not possible to default on these loans and declare bankruptcy. Welcome to modern day indenture, take your place in line.

If only I was born to 2 millionaires, I would not have this problem.....

 

[dgsilvervid]

Lenders make a killing off of these 8.0% loans, with pretty good returns that are basically guaranteed. I know at my school, they force us to take out disability insurance in case we become injured and cannot pay; in this case, the lender still gets paid. It is also not possible to default on these loans and declare bankruptcy. Welcome to modern day indenture, take your place in line.

+1 Nicely Put

 

[sazerac]

Hey all--

So the school where I've been accepted offers about 42k/year in unsub. loans. Tuition alone costs 55k. I really don't want to take out any PLUS loans for obvious reasons...

Is this the same for everyone else? Is most everyone resorting to the PLUS loan to get additional money for tuition and living expenses?

It was my impression that most students could cover their expenses using unsub. loans alone, which are bad enough. Now I have to resort to the PLUS loan... oh mercy mercy me.

Answering in order,

It is not at all obvious why you want to avoid PLUS loans.

Yes your situation is the same for most everybody. I think there is only one medical school left in the USA where the full Cost of Attendance can be covered by stafford loans alone.

Most everybody else uses PLUS loans to cover the difference between the low stafford limits and the full COA.

PLUS loans are not subsidized either, so rest assured you can get loans to the full COA at your school through unsubsidized sources.

 

[buffywannabe]

This is not true. Madison only costs 24k for tuition (in state) and I know Minnesota wasn't that much more when I applied. Not sure about other schools but there are some out there that can be covered with the standard loan options. I have not had to take out plus loans.

 

[lovemango]

This is not true. Madison only costs 24k for tuition (in state) and I know Minnesota wasn't that much more when I applied. Not sure about other schools but there are some out there that can be covered with the standard loan options. I have not had to take out plus loans.

Same here, all of the Texas public med schools are around $16-$17k for tuition and fees in-state, and total COA is about $40-42k.

 

[MDPhDJourney]

Can the amount requested from Stafford loans exceed the COA? In other words, say you want to take out an extra $2000 for living expenses, will Stafford loans cover that (assuming you have not yet reached the annual limit)?

 

[Textbookversion]

Can the amount requested from Stafford loans exceed the COA? In other words, say you want to take out an extra $2000 for living expenses, will Stafford loans cover that (assuming you have not yet reached the annual limit)?

no

 

[dsoz]

Can the amount requested from Stafford loans exceed the COA? In other words, say you want to take out an extra $2000 for living expenses, will Stafford loans cover that (assuming you have not yet reached the annual limit)?

no

The school gives a budget. You can borrow up to the amount of the budget. Not more. The exceptions I have seen are for child care costs, and also my school allows a one time $2k increase for technology purchase.

Most places I looked at had a pretty generous budget that you can live on if you are FRUGAL. Don't live like a doctor... Yet. Get a roommate, live in a smaller apartment, have a used, low cost, car. Don't eat out for most of your meals. Etc.

dsoz

 

[NeuroLAX]

Hey all--

So the school where I've been accepted offers about 42k/year in unsub. loans. Tuition alone costs 55k. I really don't want to take out any PLUS loans for obvious reasons...

Is this the same for everyone else? Is most everyone resorting to the PLUS loan to get additional money for tuition and living expenses?

It was my impression that most students could cover their expenses using unsub. loans alone, which are bad enough. Now I have to resort to the PLUS loan... oh mercy mercy me.

Hah, join the club! Stafford loans only give you so much. The rest comes from GradPLUS for me.

 

[RookTookIt]

The school gives a budget. You can borrow up to the amount of the budget. Not more. The exceptions I have seen are for child care costs, and also my school allows a one time $2k increase for technology purchase.

I was also able to get an increase for car payments from my school. But maybe some other schools budget that into COA.

 

[willen101383]

I take out like 10k a year over the "max." I have a car loan, a mortgage, and increased expenses due to this. Sucks, but you gotta do what you gotta do to survive.

 

[willen101383]

The school gives a budget. You can borrow up to the amount of the budget. Not more. The exceptions I have seen are for child care costs, and also my school allows a one time $2k increase for technology purchase.

Most places I looked at had a pretty generous budget that you can live on if you are FRUGAL. Don't live like a doctor... Yet. Get a roommate, live in a smaller apartment, have a used, low cost, car. Don't eat out for most of your meals. Etc.

dsoz

Agreed, but easier said than done, especially if you are a nontrad like me. Glad its my last year of living off of loans!!!

 

[spazz911]

My tuition/living expenses will exceed the max unsubsidized stafford loan amount. I will be taking out gradplus loans to cover the extra... what makes you think that private loans will be a better option? If you are financially savvy you might be able to find a slightly better deal, but for me, the simplicity and safety of the gradplus is worth it. Don't forget - if you want to consolidate your loans and/or apply for PSLF, you must have taken out federal loans.

Private loans often have variable APR but that is not always the case. Let's compare the average mortgage: it's ~2-3% APR. They also have contracts the lock that interest rate at that percentile. GradPLUS not only has a draw fee of 4% (wow, just extortion) but also the interest rate in 7.8%.

Yes, I don't have the security of the federal government on my back. Government loans will be forgiven if you're permanently and fully disabled or if you die. They also have a few loan forgiveness programs. This type of security is really not much security at all.

I think the best solution in this scenario would be to draw stafford loans to the max and supplement the remainder with a mortgage. I asked my fin. aid office about this and they said "I wouldn't do that personally". She gave me the same reasons that I listed above about "security" and interest rates. Frankly, I think that's very in-the-box thinking.

**EDIT-- 2-3% is the rate for variable APR mortgages. Fixed rate mortgages are 3-4%. Still not bad.

 

[MDPhDJourney]

The school gives a budget. You can borrow up to the amount of the budget. Not more.

dsoz

Thanks. Does the same rule apply to GradPLUS loans?

 

[wanderer]

Thanks. Does the same rule apply to GradPLUS loans?

Generally yes, but as others said, some financial aid offices will allow you to borrow past your budget with permission for specific expenses.

 

[MDPhDJourney]

Thank you, Textbookversion, Dsoz, and Wanderer.

So the only way to get loan money that exceeds the COA is through private loans. Much thanks.

-MPJ

 

[wanderer]

Thank you, Textbookversion, Dsoz, and Wanderer.

So the only way to get loan money that exceeds the COA is through private loans. Much thanks.

-MPJ

Yes but COA generally should cover everything as long as you have a normal budget. You just have to pick your poisons (e.g. if you want a nicer place, you will have to eat out less often etc.).

However I do remember some schools had artificially low COAs because they counted living in the dorms, where monthly fees may be half as much as surrounding areas, but you also have 3 roommates, which is ridiculous for most people. I guess they care about their stats over student comfort.

 

[spazz911]

Is my thread being hijacked here?

 

[climbouthole]

Is my thread being hijacked here?

No, it's been answered and then some. Lots of students take out PLUS loans, lots of them don't. You go to one of the more expensive schools, but hey you'll get to start med school.

 

[ijn]

Answering in order,

It is not at all obvious why you want to avoid PLUS loans.

Yes your situation is the same for most everybody. I think there is only one medical school left in the USA where the full Cost of Attendance can be covered by stafford loans alone.

Most everybody else uses PLUS loans to cover the difference between the low stafford limits and the full COA.

PLUS loans are not subsidized either, so rest assured you can get loans to the full COA at your school through unsubsidized sources.

The tuition at most Texas schools is very cheap. 15-17kish range per year. You can totally live within unsubsidized Staffords with the remaining 25-30k. Fourth year is the only time it might get a bit dicey budget wise if you do a ton of interviews and away rotations. And a small amount PLUS loans are always an option to cover the remainder.

 

[SilverCat]

Yeah, I'm taking out 30k in Grad Plus first year ( and that's with parents paying rent and personal expenses like my gas and food). Thank God I'll be IS for the rest of the time, and Stafford should cover the rest.

 

[mvenus929]

My tuition/living expenses will exceed the max unsubsidized stafford loan amount. I will be taking out gradplus loans to cover the extra... what makes you think that private loans will be a better option? If you are financially savvy you might be able to find a slightly better deal, but for me, the simplicity and safety of the gradplus is worth it. Don't forget - if you want to consolidate your loans and/or apply for PSLF, you must have taken out federal loans.

Obviously this will depend greatly on your exact situation, but I'm only facing taking out Grad PLUS loans now as a fourth year student, mostly to cover residency application expenses (I've never taken out the full COA). I've taken a look at a few of loans available to professional students that have fixed interest rates up to 6.8%... which means that some of the interest rates are actually less than the Stafford loans (and therefore much less than the Grad PLUS loans). Variable rates are less, but, of course, they are variable rates, and who knows where interest rates will go in the next 10 years.

 

[pathologyDO]

Private loans often have variable APR but that is not always the case. Let's compare the average mortgage: it's ~2-3% APR. They also have contracts the lock that interest rate at that percentile. GradPLUS not only has a draw fee of 4% (wow, just extortion) but also the interest rate in 7.8%.

Yes, I don't have the security of the federal government on my back. Government loans will be forgiven if you're permanently and fully disabled or if you die. They also have a few loan forgiveness programs. This type of security is really not much security at all.

I think the best solution in this scenario would be to draw stafford loans to the max and supplement the remainder with a mortgage. I asked my fin. aid office about this and they said "I wouldn't do that personally". She gave me the same reasons that I listed above about "security" and interest rates. Frankly, I think that's very in-the-box thinking.

**EDIT-- 2-3% is the rate for variable APR mortgages. Fixed rate mortgages are 3-4%. Still not bad.

Well yeah man, if you have a house that you can take a mortgage out on then that is obviously the way to go lol... but for the majority of people who don't own a house, it will probably be more or less no different to take out a gradPLUS vs a private loan.

Also consider the fact that you cannot use IBR for private loans while you're in residency, which may or may not complicate things depending on how large the payments will be (which of course depends on how large the loans you take out are).