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deleted367183
Hi! I don't have time to go in-depth at the moment, so I'll just put down a few links and edit the post later to add more detail.
Official caveats: this is just my experience, I'm just a resident, and your mileage may vary. Take my thoughts with a grain of salt!
I was a frugal and otherwise financially savvy person when I made the bad decision, in 2007, to take out a very large private student loan. So my first piece of advice is to stay far, far away from private student loans. I couldn't keep up with the payments and fell behind.
To get a Direct PLUS ("Grad Plus") loan, you can't have an adverse credit history. Here is the definition of adverse credit history and here is the page that links to that PDF. Your credit doesn't have to be "good," per se; for example, you could have a ton of late payments in your past, become current, and still qualify.
As I was getting accepted in 2013 for a fall 2014 start, I knew I would need a cosigner ("endorser" in their terms). I saw that I could clean up my financial affairs enough to qualify for a Direct PLUS without a cosigner for M1. I still needed one for M2-M4, because I wouldn't be working, wouldn't be able to make my payments, and would fall behind again.
What I did not realize at the time is that when you consolidate a cosigned Direct PLUS loan into a Direct Consolidation Loan, which does NOT require a credit check, the Direct PLUS loan gets paid off and your cosigner is free. This is only my experience and I can't guarantee it will be the same in your case, but the nature of debt consolidation hasn't changed, so the same should be true for you. So your cosigner is only obligated until you consolidate, most likely at the end of med school. What's more, your loans will be in in-school deferment while you're enrolled, so no payments will be due.
Caution: although I personally consolidated twice, once in 2013-ish, before med school, and once in 2019, at the end of med school, a source I trust, TISLA, says that in general one can only consolidate once. Be sure to check into this if you're considering it.
===========================================================
Here are some sites that were helpful as I was putting my financial house in order.
All of this is free, but some of these links are obviously to for-profit companies, so be careful!
Inclusiv. If your bad debt is smaller than mine was, you may be able to refinance it with a debt consolidation loan (perhaps obtained at a local credit union), stay current on the consolidation loan, and thus qualify for the Direct PLUS sans cosigner. This is a directory of community development credit unions (CDCUs), designed to serve low-income communities. If you live in one of the cities served, you can most likely book a free consultation with one of the bankers (word choice) to talk about your options, including general financial literacy topics. A CDCU may also offer a credit-rebuilding secured loan, similar to the secured credit cards I mention below.
AnnualCreditReport.com. Get free credit reports, now weekly for the duration of the pandemic. The official site.
Innovis. Just including this fourth credit bureau for completeness--the Dept. of Education pulls your credit from one of the three main bureaus, I forget which one. You can request online that a paper copy of your report be mailed to you. Mine was patchy and weird, with only some of my accounts on it.
CreditBoards. Now a very ancient site, but you still might want to poke around in their introductory material on credit repair.
Reddit CRedit looks like it fills the same niche. Only looked at it briefly.
Note: as I imply above, it's not strictly obligatory to clean up your credit for a Direct PLUS, but I decided to do it anyway. For example, you don't need to get a paid collection deleted for a Direct PLUS, you just need to pay it--but why not get it deleted at the same time, I thought.
Reddit studentloans.
TISLA. A prolific (and knowledgable) poster on that reddit, Betsy Mayotte, runs a free student loan advice service that I haven't used.
EDCAP is a similar service for New York residents.
Mint. Allows you to see all of your account balances in one place, for free. I actually did not use it as much as I thought I would. I just checked the relevant sites.
Credit Karma. Ditto, I actually didn't use it all that much. Alerts you with updates to your TransUnion and Equifax reports.
Discover Credit Scorecard. Don't have to have a Discover card. Experian updates with fewer ads than Credit Karma.
Experian. Experian offers a similar free monitoring service. Make sure you don't accidentally sign up for their paid product!
American Express MyCredit Guide. Don't need an AMEX card. TransUnion updates. Haven't used it myself.
White Coat Investor. Not just investments--has some good general info as well. For-profit site. Read with caution!
NerdWallet. A similar general info site, one of many. For-profit, read with caution!
Enroll in REPAYE early per an article on White Coat Investor and save a nice chunk of money. I did this and it worked.
MedLoans Organizer and Calculator. From the AAMC. Allows you to model various repayment scenarios using medicine-specific parameters (length of residency, etc.).
The AAMC has other financial resources, but I haven't looked through them.
The AMA also has some finance articles for trainees.
Secured credit cards. You might as well start rebuilding your credit even though it is currently borked. I found that Discover and Capital One had good options (no annual fee, not a random company). Oddly, the first credit card I qualified for while rebuilding, before I got a secured card, was an unsecured, PayPal-branded, cash back card from Synchrony Bank.
That's all for now! I hope some of this is helpful.
Official caveats: this is just my experience, I'm just a resident, and your mileage may vary. Take my thoughts with a grain of salt!
I was a frugal and otherwise financially savvy person when I made the bad decision, in 2007, to take out a very large private student loan. So my first piece of advice is to stay far, far away from private student loans. I couldn't keep up with the payments and fell behind.
To get a Direct PLUS ("Grad Plus") loan, you can't have an adverse credit history. Here is the definition of adverse credit history and here is the page that links to that PDF. Your credit doesn't have to be "good," per se; for example, you could have a ton of late payments in your past, become current, and still qualify.
As I was getting accepted in 2013 for a fall 2014 start, I knew I would need a cosigner ("endorser" in their terms). I saw that I could clean up my financial affairs enough to qualify for a Direct PLUS without a cosigner for M1. I still needed one for M2-M4, because I wouldn't be working, wouldn't be able to make my payments, and would fall behind again.
What I did not realize at the time is that when you consolidate a cosigned Direct PLUS loan into a Direct Consolidation Loan, which does NOT require a credit check, the Direct PLUS loan gets paid off and your cosigner is free. This is only my experience and I can't guarantee it will be the same in your case, but the nature of debt consolidation hasn't changed, so the same should be true for you. So your cosigner is only obligated until you consolidate, most likely at the end of med school. What's more, your loans will be in in-school deferment while you're enrolled, so no payments will be due.
Caution: although I personally consolidated twice, once in 2013-ish, before med school, and once in 2019, at the end of med school, a source I trust, TISLA, says that in general one can only consolidate once. Be sure to check into this if you're considering it.
===========================================================
Here are some sites that were helpful as I was putting my financial house in order.
All of this is free, but some of these links are obviously to for-profit companies, so be careful!
Inclusiv. If your bad debt is smaller than mine was, you may be able to refinance it with a debt consolidation loan (perhaps obtained at a local credit union), stay current on the consolidation loan, and thus qualify for the Direct PLUS sans cosigner. This is a directory of community development credit unions (CDCUs), designed to serve low-income communities. If you live in one of the cities served, you can most likely book a free consultation with one of the bankers (word choice) to talk about your options, including general financial literacy topics. A CDCU may also offer a credit-rebuilding secured loan, similar to the secured credit cards I mention below.
AnnualCreditReport.com. Get free credit reports, now weekly for the duration of the pandemic. The official site.
Innovis. Just including this fourth credit bureau for completeness--the Dept. of Education pulls your credit from one of the three main bureaus, I forget which one. You can request online that a paper copy of your report be mailed to you. Mine was patchy and weird, with only some of my accounts on it.
CreditBoards. Now a very ancient site, but you still might want to poke around in their introductory material on credit repair.
Reddit CRedit looks like it fills the same niche. Only looked at it briefly.
Note: as I imply above, it's not strictly obligatory to clean up your credit for a Direct PLUS, but I decided to do it anyway. For example, you don't need to get a paid collection deleted for a Direct PLUS, you just need to pay it--but why not get it deleted at the same time, I thought.
Reddit studentloans.
TISLA. A prolific (and knowledgable) poster on that reddit, Betsy Mayotte, runs a free student loan advice service that I haven't used.
EDCAP is a similar service for New York residents.
Mint. Allows you to see all of your account balances in one place, for free. I actually did not use it as much as I thought I would. I just checked the relevant sites.
Credit Karma. Ditto, I actually didn't use it all that much. Alerts you with updates to your TransUnion and Equifax reports.
Discover Credit Scorecard. Don't have to have a Discover card. Experian updates with fewer ads than Credit Karma.
Experian. Experian offers a similar free monitoring service. Make sure you don't accidentally sign up for their paid product!
American Express MyCredit Guide. Don't need an AMEX card. TransUnion updates. Haven't used it myself.
White Coat Investor. Not just investments--has some good general info as well. For-profit site. Read with caution!
NerdWallet. A similar general info site, one of many. For-profit, read with caution!
Enroll in REPAYE early per an article on White Coat Investor and save a nice chunk of money. I did this and it worked.
MedLoans Organizer and Calculator. From the AAMC. Allows you to model various repayment scenarios using medicine-specific parameters (length of residency, etc.).
The AAMC has other financial resources, but I haven't looked through them.
The AMA also has some finance articles for trainees.
Secured credit cards. You might as well start rebuilding your credit even though it is currently borked. I found that Discover and Capital One had good options (no annual fee, not a random company). Oddly, the first credit card I qualified for while rebuilding, before I got a secured card, was an unsecured, PayPal-branded, cash back card from Synchrony Bank.
That's all for now! I hope some of this is helpful.
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