Paying for medical school

[mz1217]

I am very fortunate and excited to have been accepted to a medical school this cycle and even luckier that my family wants to financially support me through. The cost of attendance for this school, however, is much higher than we had anticipated.

Although with our combined efforts, we have enough to pay everything off without taking loans, I'm wondering if it would be more worth it to take out the loans (I've been offered both Unsub Fed Direct Loans and Unsub Direct Grad PLUS) anyway, invest my money while the loans aren't accruing interest, and pay them off at the end. Or if anyone else has any experience with a similar situation and how to minimize the financial burden while still paying off all of my debt by the end of med school, I'd really appreciate it!

---

Members don't see this ad.

 

[Mr.Smile12]

Whatever you do, talk with your financial aid office. They have likely already told you that private loans are your absolute last resort. Without numbers, we can only conjecture not advise you.

We do have a financial aid subforum though it is not utilized as much to have these discussions.

 

[Hollow Knight]

"I'm wondering if it would be more worth it to take out the loans (I've been offered both Unsub Fed Direct Loans and Unsub Direct Grad PLUS) anyway, invest my money while the loans aren't accruing interest, and pay them off at the end. "

This is a bad idea. I mean, technically, it's possible for you to get a stock market return that's higher than the interest rate on your debt and therefore make money, but you can't guarantee your return will be that high, and interest rates on loans right now are SUPER high. Why do you think your loans won't accrue interest? My federal loans are accruing interest as we speak.

You'd be better off just not borrowing at all or borrowing as little as possible. Don't do this switcheroo thing. There's no shortcut to wealth, you have to spend less than you make and invest over a long period of time.

Also, go read the White Coat Investor

 

[danty]

My parents' financial advisor suggested that I take out Unsub Fed Direct Loans. It has a better term than Unsub Direct Grad PLUS. He said there are various loan forgiveness programs to explore post-graduation, depending on where I work, specialty, etc. The after-tax difference between investment return and loan interest is the fee to pay for the possibility of loan forgiveness in the future.

 

[Hollow Knight]

My parents' financial advisor suggested that I take out Unsub Fed Direct Loans. It has a better term than Unsub Direct Grad PLUS. He said there are various loan forgiveness programs to explore post-graduation, depending on where I work, specialty, etc. The after-tax difference between investment return and loan interest is the fee to pay for the possibility of loan forgiveness in the future.

Your parents should get a new financial advisor

 

[RangerBob]

Your parents should get a new financial advisor

Agree. Horrible advice above.

Avoid/minimize debt at all costs. If forgiveness is around and one is eligible, go for it. But there's no certainty that one will have a PSLF-eligible job for 10-years post-graduation. The 20-25yr forgiveness plans aren't worth it unless you have astronomical debt and minimal income, in addition to the ability to save up for the "tax-bomb."

My parents' financial advisor suggested that I take out Unsub Fed Direct Loans. It has a better term than Unsub Direct Grad PLUS.

Your advisor is stating the obvious. The government is aware of this and they max our your direct unsubsidized loans before they issue you direct grad plus loans.

https://studentaid.gov/understand-aid/types/loans

Read up WhiteCoatInvestor.com. Start with the "start here" section. It should be required reading for anyone going to med school.

 

[voxveritatisetlucis]

They do accrue during medical school and in all likelihood, programs like SAVE are going to be dismantled regardless of who wins election