Med school debt?

[yoyoni]

I'm an incoming M1 who will be attending one of the most expensive private med schools in the country (I irresponsibly inadvertently ignored the financial aspect of med school while applying in undergrad, so here I am) and I will be taking out loans to pay for all of it. I'm looking at 300k in raw loans, not counting interest (which should put it at ~500k after residency?). I'm wondering 1) How many years would this take to pay back with a reasonable plan? 2) Should I like frugally after residency and put a huge chunk of my salary towards the loans? If I did so, how quickly do you think I could pay it all back? (I just worry I'll be so burned out by the end of this all I'll want a nice place, etc. and won't want to live like a med student for the rest of my young years) 3) Would it be irresponsible to make specialty choice without considering the financial reimbursement aspect? I'm (as of right now) interested in surgical spec., and even though I know myself and that I wouldn't be interested in PC, I hate the notion of having to consider money in the speciality equation, when that's not why I chose medicine in the first place, and 4) Should I live at home the first two years to save money? I would save about $16k a year (not counting interest), but I'm not if I would have a hard time being involved in the social scene and hanging out with friends/if I would feel isolated/if I would get tired of commuting.

Does anyone have any advice and/or experience with any of the above and would be willing to offer advice? Thank you all so much!!!

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[CharlieBillings]

I am also curious for an answer.

ALSO: What the point in a 10 year repayment plan? Why not just do 25 year? You can always pay more? So you could match the payments of a 10 year plan if desired but still have the flexibility (say you wanted to lower loan payments to go on vacation, pay for flood damage, etc).

 

[whatisthisstuff]

1. and 2. I just flat out wouldn't worry about yet. It will take a little time and yes you should pay it back aggressively. How aggressively is up to you at that point and you'll know more when its time.

3. Yes you should certainly consider finances when making a specialty choice. Everybody should. That doesn't mean its the only factor though.
4. Its financially smart to live at home if you can. But its a personal decision. Depends on your relationship with your parents and how well you would envision that situation going. If you have a hard time making friends then it might make you feel isolated.

And to the 2nd post...the point is INTEREST. There is not much you can do with your money to offset the 5-9% interest on 300k+ you probably have on your loans that would be financially advantageous.

 

[CharlieBillings]

And to the 2nd post...the point is INTEREST. There is not much you can do with your money to offset the 5-9% interest on 300k+ you probably have on your loans that would be financially advantageous.

Yeah but the point is the 25 year plan is more flexible. You can pay it off with the same $/month as the 10 year, but you get more flexibility for no cost (or is there a cost I'm not aware of?). As far as I know the interest rate is not different between repayment models.

 

[TaroBubbleTea]

Yeah but the point is the 25 year plan is more flexible. You can pay it off with the same $/month as the 10 year, but you get more flexibility for no cost (or is there a cost I'm not aware of?). As far as I know the interest rate is not different between repayment models.

Do you really want to be paying off your student loans while you're in your late 50's? You will be paying substantially more in the long run if you stretch your loan out for an additional 15 years.

 

[yoyoni]

@BlackLips Thanks for the response! I know this seems a little premature, but I ask 1) and 2) because it's starting to be the time to make a decision on 4). All through undergrad I operated under the thought of "I'll pay it back" and "What's an extra $40k in loans when you're already $250k deep" but now I'm starting to consider the idea that there are other places I might want to allocate a few k's a month to after I'm done with residency/interest on the loans adds up quick... so I guess the "right now" question is, do I live at home to save money the first two years? I get along with my parents well, and I love studying at home, but it's really the adverse effects it would have on my social life/ability to make friends and the commute (would have to wake up early to avoid traffic, etc.).

Any advice on 1) from current med students/residents or on 4) from anyone in a similar situation (or anyone willing to offer their thoughts)? Thanks guys

 

[whatisthisstuff]

Yeah but the point is the 25 year plan is more flexible. You can pay it off with the same $/month as the 10 year, but you get more flexibility for no cost (or is there a cost I'm not aware of?). As far as I know the interest rate is not different between repayment models.

Quite simply you don't want flexibility. We are talking 2k a month in interest. You want to be paying the absolute maximum that you can and you need to make the other things work. While I understand the idea about having other money available thats generally not a smart strategy because for most people if they don't have to pay it they won't. Especially for things like vacation...

 

[67552931811]

Will have between 500-550K in debt post training. Sub 500 if I can moonlight during training. Will refinance at a much lower rate and pay it all off in under 5 years into attending-hood. Sucks, but that's life. I also plan on going into a speciality that's on the lower end of compensation.

That's my plan. I would probably stroke out if I dragged that out 20-25 years. YMMV.

 

[NucleusO]

Wouldn't it be best to start paying it off during residency? Can't you make income-based payments and then after ten years go for the student loan forgiveness?

 

[YoungDoc25]

Not to derail the OPs question, but what about the opposite end of the spectrum. I'm looking at 130k-150k in loans. Is it reasonable to pay that off in 2-3 years if I can make payments in residency? Planning on refinancing ASAP. Wife makes 50k-70k so I'm thinking I can make some sort of payments in residency.

 

[CharlieBillings]

Quite simply you don't want flexibility. We are talking 2k a month in interest. You want to be paying the absolute maximum that you can and you need to make the other things work. While I understand the idea about having other money available thats generally not a smart strategy because for most people if they don't have to pay it they won't. Especially for things like vacation...

But you can do this on a 25 year plan because you're allowed to pay more than monthly owed. You can match the payments of a 10 year plan, which would mean you pay the same amount in interest right?

 

[akuko2]

Wouldn't it be best to start paying it off during residency? Can't you make income-based payments and then after ten years go for the student loan forgiveness?

That would be ideal, but the only problem is there is no guaranteed track for public service loan forgiveness. The program involves you making 120 consecutive monthly payments (equating to 10 years worth), but there is no security that the program will not be done away with or capped at a specific level of loan forgiveness which is already being talked about. Most people plan to get on an income based repayment plan which caps what they pay at around 15% of their income which is great because they will save more when the bulk of their debt is forgiven, however if PSLF is done away with or capped, you've shot yourself in the foot as now you have much more loan to pay off and haven't been making as much of a dent in it expecting it all to be done away with.

 

[vm26]

I'm an incoming M1 who will be attending one of the most expensive private med schools in the country (I irresponsibly inadvertently ignored the financial aspect of med school while applying in undergrad, so here I am) and I will be taking out loans to pay for all of it. I'm looking at 300k in raw loans, not counting interest (which should put it at ~500k after residency?). I'm wondering 1) How many years would this take to pay back with a reasonable plan? 2) Should I like frugally after residency and put a huge chunk of my salary towards the loans? If I did so, how quickly do you think I could pay it all back? (I just worry I'll be so burned out by the end of this all I'll want a nice place, etc. and won't want to live like a med student for the rest of my young years) 3) Would it be irresponsible to make specialty choice without considering the financial reimbursement aspect? I'm (as of right now) interested in surgical spec., and even though I know myself and that I wouldn't be interested in PC, I hate the notion of having to consider money in the speciality equation, when that's not why I chose medicine in the first place, and 4) Should I live at home the first two years to save money? I would save about $16k a year (not counting interest), but I'm not if I would have a hard time being involved in the social scene and hanging out with friends/if I would feel isolated/if I would get tired of commuting.

Does anyone have any advice and/or experience with any of the above and would be willing to offer advice? Thank you all so much!!!

To give you a reference point I graduated with 160K (federal at 3.1%), which worked out to about $900/month for 25 years (I think)...You may be able to make some payments during residency (I made 12 consecutive payments which dropped my interest rate)...I think your interest rates will influence how aggressive you should be paying your loans after residency...compensation should certainly play a role in your decision of specialty...I would skip living at home, 16K is not worth it...my largest concern would be the longterm uncertainty of healthcare, I think we are an election or 2 before single-payor may become a reality given ineptitude of current administration and shifting demographics of our country. Rule of thumb is that your total student debt should not exceed your expected 1st year earnings...

 

[yoyoni]

That would be ideal, but the only problem is there is no guaranteed track for public service loan forgiveness. The program involves you making 120 consecutive monthly payments (equating to 10 years worth), but there is no security that the program will not be done away with or capped at a specific level of loan forgiveness which is already being talked about. Most people plan to get on an income based repayment plan which caps what they pay at around 15% of their income which is great because they will save more when the bulk of their debt is forgiven, however if PSLF is done away with or capped, you've shot yourself in the foot as now you have much more loan to pay off and haven't been making as much of a dent in it expecting it all to be done away with.

Oh shoot, let's say the program is not done away with and I do a 7 year residency. In this case would I be paying an income-based repayment while in residency and for 3 years as an attending and then do loan forgiveness and be done with it?

 

[yoyoni]

To give you a reference point I graduated with 160K (federal at 3.1%), which worked out to about $900/month for 25 years (I think)...You may be able to make some payments during residency (I made 12 consecutive payments which dropped my interest rate)...I think your interest rates will influence how aggressive you should be paying your loans after residency...compensation should certainly play a role in your decision of specialty...I would skip living at home, 16K is not worth it...my largest concern would be the longterm uncertainty of healthcare, I think we are an election or 2 before single-payor may become a reality given ineptitude of current administration and shifting demographics of our country. Rule of thumb is that your total student debt should not exceed your expected 1st year earnings...

Only 160k in debt! I think you're right about the 16k not being worth living at home, I think I just needed to know that it wasn't completely a financially irresponsible decision. But with total student debt not exceeding my expecting 1st year earnings I think that leaves me with...plastics?

I guess I'm not so concerned about paying it back per se, rather I'm concerned about not being able to live somewhere nice, do nice things, if I have a family at some point be able to afford to provide them with everything they need, etc. if that makes sense. I think I just hate the idea of my loans impinging on my family's quality of life

 

[akuko2]

Oh shoot, let's say the program is not done away with and I do a 7 year residency. In this case would I be paying an income-based repayment while in residency and for 3 years as an attending and then do loan forgiveness and be done with it?

Essentially yes, PUBLIC SERVICE loan forgiveness was a way for the gvt to encourage working for nonprofits/charities in exchange for debt forgiveness. This however is a sweet deal for doctors because many hospitals are nonprofits so your residency and future employment would usually count. The gvt never intended it to be for docs because the way our pay is structured to balloon up after residency makes our contribution to the debt minimal if we were on an income based repayment plan and leaves the bulk in their lap, so many people have rumbled on about how it could possibly be changed or capped in the future. Is there a good possibility it will be axed or reformed? Your guess is as good as mine. I don't feel like playing Russian roulette with my future, especially when congress is holding the gun.

 

[Mithril]

Hot damn, I feel for you guys who have so much debt.

 

[Stagg737]

Wouldn't it be best to start paying it off during residency? Can't you make income-based payments and then after ten years go for the student loan forgiveness?

If you can start paying it back in residency, but depending on your income and what expenses you have (like supporting an SO/family, paying off other loans/debt, house payments, car payments, etc) it may not be reasonable to pay. You can make the income based payments, but most people would generally advise against counting on government programs for debt relief. There was a thread about this in the attendings/residents forums earlier this week:

Public Service Loan Forgiveness may no longer be a reality...

Only 160k in debt! I think you're right about the 16k not being worth living at home, I think I just needed to know that it wasn't completely a financially irresponsible decision. But with total student debt not exceeding my expecting 1st year earnings I think that leaves me with...plastics?

I guess I'm not so concerned about paying it back per se, rather I'm concerned about not being able to live somewhere nice, do nice things, if I have a family at some point be able to afford to provide them with everything they need, etc. if that makes sense. I think I just hate the idea of my loans impinging on my family's quality of life

I think the rule of thumb with debt that vm26 spoke of is more for people who may have a limited income, not for higher earners. It's harder to pay back 40k in debt when you only make 40k than it is to pay back 400k when you make 400k (or even 200k for that matter). Keep in mind that the higher your guaranteed income, the less concerning large debt will be. With 300k base loan, it likely will impact the quality of life you can provide for your family, but it's certainly manageable. If it's that concerning, you can live off of 50k for 4-5 years and dump the rest into loan repayment and get it done. Or you can do a 25 year payment plan. You'll pay a lot more overall, but it'll be a smaller portion of your income and you should still be able to provide a comfortable life for your family assuming you're not trying to imitate the Duggars.

 

[yoyoni]

I think the rule of thumb with debt that vm26 spoke of is more for people who may have a limited income, not for higher earners. It's harder to pay back 40k in debt when you only make 40k than it is to pay back 400k when you make 400k (or even 200k for that matter). Keep in mind that the higher your guaranteed income, the less concerning large debt will be. With 300k base loan, it likely will impact the quality of life you can provide for your family, but it's certainly manageable. If it's that concerning, you can live off of 50k for 4-5 years and dump the rest into loan repayment and get it done. Or you can do a 25 year payment plan. You'll pay a lot more overall, but it'll be a smaller portion of your income and you should still be able to provide a comfortable life for your family assuming you're not trying to imitate the Duggars.

Thanks for the advice and reassuring words

 

[Perrotfish]

Essentially yes, PUBLIC SERVICE loan forgiveness was a way for the gvt to encourage working for nonprofits/charities in exchange for debt forgiveness. This however is a sweet deal for doctors because many hospitals are nonprofits so your residency and future employment would usually count. The gvt never intended it to be for docs because the way our pay is structured to balloon up after residency makes our contribution to the debt minimal if we were on an income based repayment plan and leaves the bulk in their lap, so many people have rumbled on about how it could possibly be changed or capped in the future. Is there a good possibility it will be axed or reformed? Your guess is as good as mine. I don't feel like playing Russian roulette with my future, especially when congress is holding the gun.

There is a possibility that it already has been reformed, and the government will decide retroactively that none of your medical work counts towards the program: https://www.nytimes.com/2017/03/30/business/student-loan-forgiveness-program-lawsuit.html

 

[kb0275]

Does anyone know when we should be applying for loans for the upcoming school year? Thanks in advance

 

[yoyoni]

Does anyone know when we should be applying for loans for the upcoming school year? Thanks in advance

I think when your school sends out your financial aid package it will include the loans (my understanding is that all the loans we will need to take out will be done through the school). And the loan package will be a mix of Direct Stafford loans and GradPLUS loans.

Can someone confirm?

 

[Stagg737]

Does anyone know when we should be applying for loans for the upcoming school year? Thanks in advance

I think when your school sends out your financial aid package it will include the loans (my understanding is that all the loans we will need to take out will be done through the school). And the loan package will be a mix of Direct Stafford loans and GradPLUS loans.

Can someone confirm?

Idk when schools require it, but you can start filling out FAFSA as soon as the new year begins. My school recommends submitting it by March 15, I'm sure other schools have other dates. Like most other things, the sooner you get it done the the better.

 

[CharlieBillings]

When our school sends us our loan package how do we go about requesting more?

 

[mistafab]

I'm not sure what you mean.

The school gives you a loan package that will cover up to the cost of attendence (COA) with a mix of loans. You can't request more than the COA from whatever package they give you.

Did that answer your question?

When our school sends us our loan package how do we go about requesting more?

 

[kb0275]

I'm not sure what you mean.

The school gives you a loan package that will cover up to the cost of attendence (COA) with a mix of loans. You can't request more than the COA from whatever package they give you.

Did that answer your question?

So if they automatically send a loan package in the mail, what is the purpose of applying for fafsa then?

 

[KingD]

You can always explore the possibility of an MD/PhD program with a tuition waiver.

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[cyanide12345678]

So if they automatically send a loan package in the mail, what is the purpose of applying for fafsa then?

You can't get federal loans without Fafsa. They might show you what their loan package usually looks like, but you realistically cannot get federal loans until you fill out fafsa.

 

[mistafab]

On top of not getting loans without FAFSA, your FAFSA determines how much unsubsidized or subsidized loan you can get as part of your package. These are typically lower interest than the Grad PLUS loans that everyone is eligible for. You want to minimize how much of your total portion comes from these high interest loans like Grad PLUS. Realistically, this means you will take as much federal money as they possibly offer, and then you will cover the rest that you need with the Grad PLUS loans.

So if they automatically send a loan package in the mail, what is the purpose of applying for fafsa then?

 

[cyanide12345678]

I'm an incoming M1 who will be attending one of the most expensive private med schools in the country (I irresponsibly inadvertently ignored the financial aspect of med school while applying in undergrad, so here I am) and I will be taking out loans to pay for all of it. I'm looking at 300k in raw loans, not counting interest (which should put it at ~500k after residency?). I'm wondering 1) How many years would this take to pay back with a reasonable plan? 2) Should I like frugally after residency and put a huge chunk of my salary towards the loans? If I did so, how quickly do you think I could pay it all back? (I just worry I'll be so burned out by the end of this all I'll want a nice place, etc. and won't want to live like a med student for the rest of my young years) 3) Would it be irresponsible to make specialty choice without considering the financial reimbursement aspect? I'm (as of right now) interested in surgical spec., and even though I know myself and that I wouldn't be interested in PC, I hate the notion of having to consider money in the speciality equation, when that's not why I chose medicine in the first place, and 4) Should I live at home the first two years to save money? I would save about $16k a year (not counting interest), but I'm not if I would have a hard time being involved in the social scene and hanging out with friends/if I would feel isolated/if I would get tired of commuting.

Does anyone have any advice and/or experience with any of the above and would be willing to offer advice? Thank you all so much!!!

1) It's okay. 300k isn't the worst. Lets say you do a 5 year residency, and really do end up with half a million in debt. Is it really that bad? Lets see....lets say you pick wisely and end up with a higher paying specialty where you're coming out making maybe 300k. After taxes you're looking at about a 200k income. Quite literally you can pay 100k each year and not feel a dent on your lifestyle, and you'll be done with your loans in maybe 6 years. A 100k after taxes is a lot of money. That's still more than 80 or so percent of what the average American makes. And that's after paying a 100 grand! Now....the fact that 40% of your loan is interest, which is tax deductible, you'll be able to deduct quite a bit of those payments from your income taxes on top of things So no, you wouldn't be living like a med student even if you decided to pay off your loans in 5-6 years after residency assuming you make a reasonable salary.

2) It's always a good idea to pay off loans as soon as possible. The stock market is unpredictable. The only predictable return on investment is when you pay off a debt and save yourself from a certain cost (6.8%). So...everytime I'm paying off my 6.8% loans, I'm guaranteeing a 6.8% return on investment in because of decreased costs in the future. So yes...its better than any stock investment that you can ever make.

3) Financial consideration and lifestyle should always be under consideration. Financial stress sucks. Money is important. college is expensive. Kids are expensive. If you're going to have a family, feed your family, find a good home, have a comfortable life, pay for the best schooling for your children, then yes you should think about lifestyle Though most physicians have a very comfortable lifestyle. By default you'll make 200k minimum whatever you choose.

4) You'll save 32k. It's upto you on how much you value 32k. You can still have a fair social lif e as well. It is reasonable to argue that you won't necessarily have to commute everyday either if you just streamed the lectures, and only commuted to be part of the social events. Or you could always just commute to the school library and socialize with people at the library. Being social is a choice. If you're already at school, in the library studying, then you're already around friends and you can always go out for dinner breaks and "socialize". But again, being social is a choice. I lived 5 minutes away from school and wasn't the most social human being (especially since I was a streamer). Was very social when I studied in a library though.

So just relax about the 300k. It will work out.

 

[CharlieBillings]

I'm not sure what you mean.

The school gives you a loan package that will cover up to the cost of attendence (COA) with a mix of loans. You can't request more than the COA from whatever package they give you.

Did that answer your question?

Then why is everybody, including the goverment website, saying things like "Only take out the minimum you need". Doesn't that sort of advice imply it is possible to take out more than you need?

 

[cyanide12345678]

Then why is everybody, including the goverment website, saying things like "Only take out the minimum you need". Doesn't that sort of advice imply it is possible to take out more than you need?

You can take out more than you "Need". They calculate the typical expenses. But the living expenses they calculate are quite generous. My tuition was 17k a year. but my max out loan offer was around 40k which included living expenses, books, and all the miscellaneous things. My monthly expenses after rent and food were maybe 1200 a month? So realistically I could have just taken out 30-32k out of my max 40k loan offer. I personally choose to max out on my loans. Because I maxed out on my loans, I accumulated money in a savings account. I graduated medical school with 45k in the bank (and well mostly the stock market) and 170k in loans. I could have graduated with 120k in loans and 0 in the bank. In the next 3-4 years the cost of the extra 45k that I accumulated in the bank will be 6.8% which is about 12k in 3-4 years. Which is essentially 5 extra days of work for me as a future EM physician. I chose to take that extra debt for the comfort of having a safety net through residency so I'm not living a paycheck to paycheck life and have plenty of savings for a rainy day. As someone who just got married, I was able to spend on my wedding, I'll now be able to pay for a 2nd car and pay for quite a few more things iwithout worrying about finances. So yes, I'll pay 12k - 15k in the long run for having a lot of financial security through medical school and residency. That was a choice. But yea...the loan offer is usually fairly generous that is more than adequate if you're even remotely careful about your expenses. You can take out significantly less if you spend less.

 

[mistafab]

As @cyanide12345678 said - it is 100% possible to take out more than you need. Anyone who takes the entire COA out in loans has absolutely taken out more than they needed. The complete COA is there so that the med student who blows all their money on alcohol, eats out every meal, and buys TVs on credit can still survive on their loans.

Then why is everybody, including the goverment website, saying things like "Only take out the minimum you need". Doesn't that sort of advice imply it is possible to take out more than you need?

 

[oznefu]

Then why is everybody, including the goverment website, saying things like "Only take out the minimum you need". Doesn't that sort of advice imply it is possible to take out more than you need?

I think they're referring to additional 'projected' expenses outside of tuition. For instance,they allocate expenses for transportation and housing costs which you might not need at all if you live at home or if you find housing cheaper than what they project. Basically if you think you will not need the full COA loan then take only what you think you will need.


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[CharlieBillings]

Well I hope the school I end up at has a really high CoA and a relatively low tuition so I can have the freedom to take out exactly what I want in loans.

 

[coldcase331]

Well I hope the school I end up at has a really high CoA and a relatively low tuition so I can have the freedom to take out exactly what I want in loans.

You seriously don't have to worry about it, most government loans will cover your CoA+Living expense. My advice is to take out as much as you can, because you are given a 120 day return policy on any loans you don't need. So if you realize near the end of the semester that you don't need 1-2k of what you took out, you can give it back interest free.

 

[CharlieBillings]

You seriously don't have to worry about it, most government loans will cover your CoA+Living expense. My advice is to take out as much as you can, because you are given a 120 day return policy on any loans you don't need. So if you realize near the end of the semester that you don't need 1-2k of what you took out, you can give it back interest free.

Man these loans just keep getting better and betters. Now only if we could do something about that 7% interest lol.

 

[yoskram]

"Now....the fact that 40% of your loan is interest, which is tax deductible, you'll be able to deduct quite a bit of those payments from your income taxes on top of things"





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Sorry just need to address this. You can only deduct up to $2500 from interest per year:
Publication 970 (2016), Tax Benefits for Education

 

[colbgw02]

Now....the fact that 40% of your loan is interest, which is tax deductible, you'll be able to deduct quite a bit of those payments from your income taxes on top of things So no, you wouldn't be living like a med student even if you decided to pay off your loans in 5-6 years after residency assuming you make a reasonable salary.

Just so everyone knows, the maximum amount of student loan interest that can be deducted is $2500. Also, this deduction is phased out at AGIs of $80K ($160K for couples) and up, so it's only really available to you while in residency. And maybe not even then depending on moonlighting or how much your spouse makes.

ETA: Oops, I see yoskram beat me to it.

 

[weasel23]

what about for a couple? still 2500? or would it double?

Sorry just need to address this. You can only deduct up to $2500 from interest per year:
Publication 970 (2016), Tax Benefits for Education

Just so everyone knows, the maximum amount of student loan interest that can be deducted is $2500. Also, this deduction is phased out at AGIs of $80K ($160K for couples) and up, so it's only really available to you while in residency. And maybe not even then depending on moonlighting or how much your spouse makes.

ETA: Oops, I see yoskram beat me to it.

 

[colbgw02]

what about for a couple? still 2500? or would it double?

Don't think so, but your SO has the opportunity for the same deduction, provided that he/she also paid student loan interest.

 

[vernhart]

You can take out more than you "Need". They calculate the typical expenses. But the living expenses they calculate are quite generous. My tuition was 17k a year. but my max out loan offer was around 40k which included living expenses, books, and all the miscellaneous things. My monthly expenses after rent and food were maybe 1200 a month? So realistically I could have just taken out 30-32k out of my max 40k loan offer. I personally choose to max out on my loans. Because I maxed out on my loans, I accumulated money in a savings account. I graduated medical school with 45k in the bank (and well mostly the stock market) and 170k in loans. I could have graduated with 120k in loans and 0 in the bank. In the next 3-4 years the cost of the extra 45k that I accumulated in the bank will be 6.8% which is about 12k in 3-4 years. Which is essentially 5 extra days of work for me as a future EM physician. I chose to take that extra debt for the comfort of having a safety net through residency so I'm not living a paycheck to paycheck life and have plenty of savings for a rainy day. As someone who just got married, I was able to spend on my wedding, I'll now be able to pay for a 2nd car and pay for quite a few more things iwithout worrying about finances. So yes, I'll pay 12k - 15k in the long run for having a lot of financial security through medical school and residency. That was a choice. But yea...the loan offer is usually fairly generous that is more than adequate if you're even remotely careful about your expenses. You can take out significantly less if you spend less.

I don't believe this is legal...and I'm not sure how they missed it when you filed your taxes.

 

[sazerac]

I don't believe this is legal...and I'm not sure how they missed it when you filed your taxes.

You don't log stock purchases on your taxes.

 

[vernhart]

You don't log stock purchases on your taxes.

No but if they received dividends/interest or sold the stock by now (which was an assumption, yes) then that does go on your taxes. To that point, it most definitely does ask about holdings in FAFSA, though.

 

[vernhart]

No but if they received dividends/interest or sold the stock by now (which was an assumption, yes) then that does go on your taxes. To that point, it most definitely does ask about holdings in FAFSA, though.

EDIT: looked it up and really he is only likely to run into trouble if they are subsidized loans (from the gov)

 

[Stagg737]

You can take out more than you "Need". They calculate the typical expenses. But the living expenses they calculate are quite generous. My tuition was 17k a year. but my max out loan offer was around 40k which included living expenses, books, and all the miscellaneous things. My monthly expenses after rent and food were maybe 1200 a month? So realistically I could have just taken out 30-32k out of my max 40k loan offer. I personally choose to max out on my loans. Because I maxed out on my loans, I accumulated money in a savings account. I graduated medical school with 45k in the bank (and well mostly the stock market) and 170k in loans. I could have graduated with 120k in loans and 0 in the bank. In the next 3-4 years the cost of the extra 45k that I accumulated in the bank will be 6.8% which is about 12k in 3-4 years. Which is essentially 5 extra days of work for me as a future EM physician. I chose to take that extra debt for the comfort of having a safety net through residency so I'm not living a paycheck to paycheck life and have plenty of savings for a rainy day. As someone who just got married, I was able to spend on my wedding, I'll now be able to pay for a 2nd car and pay for quite a few more things iwithout worrying about finances. So yes, I'll pay 12k - 15k in the long run for having a lot of financial security through medical school and residency. That was a choice. But yea...the loan offer is usually fairly generous that is more than adequate if you're even remotely careful about your expenses. You can take out significantly less if you spend less.

Damn, I wish I had the option to attend a school even twice that expensive.

As @cyanide12345678 said - it is 100% possible to take out more than you need. Anyone who takes the entire COA out in loans has absolutely taken out more than they needed. The complete COA is there so that the med student who blows all their money on alcohol, eats out every meal, and buys TVs on credit can still survive on their loans.

Another thing to mention is that the Stafford loans are only available for the first $42,500 or something like that, everything else after that has to be covered by Grad Plus loans which have the higher interest rates. Just something to keep in mind for people wanting to take out the max loans.

 

[cyanide12345678]

EDIT: looked it up and really he is only likely to run into trouble if they are subsidized loans (from the gov)

If only I had subsidized loans then atleast the loans wouldn't have accumulated during medical school. Almost all my loans are unsubsidized loans. And no, it's not illegal. And yes, I got dividends as well as reported stock sales on my federal taxes. Never had any issues what so ever. Was able to roughly beat the 6.8% interest rate actually. But now that the market is at an all time high, I'm mostly out of the market completely now (other than maybe 2.5k that remains in the market. But definitely had upto 30k in the market during medical school - it was a good time for stocks).

I mean I've been playing on the stock market since I was 19. So that's what I did with my "savings". Otherwise, I wouldn't recommend that for anyone. The point I was making was that maxing out on loans really comes at a small extra interest cost (12-15k) in my case, which in the grand scheme of things is maybe 5-6 days of work for me when I make an attending EM salary. Based on that, I personally felt that the benefit of more debt and the financial independence out weighed the extra interest.

 

[cyanide12345678]

Damn, I wish I had the option to attend a school even twice that expensive.

Texas state schools are amazing Believe it or not, we were pretty pissed at UTSW for being the most expensive school in texas -_- It's even pricier than Baylor which is a PRIVATE school!!! That still bothers me -_-

 

[cyanide12345678]

As @cyanide12345678 said - it is 100% possible to take out more than you need. Anyone who takes the entire COA out in loans has absolutely taken out more than they needed. The complete COA is there so that the med student who blows all their money on alcohol, eats out every meal, and buys TVs on credit can still survive on their loans.

Someone I knew used to do go karting twice a week ($160-200 weekly expense), he somewhat struggled to live within the cost of attendance. But he also spent far too much on buying things that he didn't need

 

[kb0275]

If only I had subsidized loans then atleast the loans wouldn't have accumulated during medical school. Almost all my loans are unsubsidized loans. And no, it's not illegal. And yes, I got dividends as well as reported stock sales on my federal taxes. Never had any issues what so ever. Was able to roughly beat the 6.8% interest rate actually. But now that the market is at an all time high, I'm mostly out of the market completely now (other than maybe 2.5k that remains in the market. But definitely had upto 30k in the market during medical school - it was a good time for stocks).

I mean I've been playing on the stock market since I was 19. So that's what I did with my "savings". Otherwise, I wouldn't recommend that for anyone. The point I was making was that maxing out on loans really comes at a small extra interest cost (12-15k) in my case, which in the grand scheme of things is maybe 5-6 days of work for me when I make an attending EM salary. Based on that, I personally felt that the benefit of more debt and the financial independence out weighed the extra interest.

Can you tell me what to invest in?