Possible to pay off loans during medical school years?

[libraryismyhome]

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I will be starting medical school this August and received some unsubsidized federal loan which the interest rate would rise to almost 9% during my school years.

Fortunately, since my family (parents, siblings and I) don't make much, I was qualified for need based aid.

But my grandfather decided to help me and he is willing to offer $20,000. This happened after my fafsa was processed and my need-based aid was decided. and now, combining unsubsidized loan, need based aid, and 20 grand exceeds this year's cost of attendance.

But I am afraid that this could adversely affect my need-based aid or fafsa loan status for this year and even future.


What should I do? I really would like to do my best to not to affect my need-based aid
Should I report this to my school and adjust the loan amount?
Should I just use this money after I receive my loan and aid and then pay off the loan using the money during the first year?
Should I keep this money until I finish medical school and then use it to pay off the loan?

 

[masaraksh]

Call Fin. Aid. at your school.

 

[libraryismyhome]

Call Fin. Aid. at your school.

Are you kidding me? so call them and say, "hey I appreciate your need-based aid and just letting you know that I also receive 20 grand from my grandpa."

 

[masaraksh]

Well you could just take out slightly less in loans each year.... like 5k less. And use the money your fam gave you to pay for living expenses - in cash. Not sure about the ethics of this since I don't get need-based aid, but seems like an option.

Say your tuition + fees is 55k and you need 20 for living expenses. Total = 75k. Now try to manuever it so that aid + loans = 70k.

 

[WhippleWhileWeWork]

I will be starting medical school this August and received some unsubsidized federal loan which the interest rate would rise to almost 9% during my school years.

Fortunately, since my family (parents, siblings and I) don't make much, I was qualified for need based aid.

But my grandfather decided to help me and he is willing to offer $20,000. This happened after my fafsa was processed and my need-based aid was decided. and now, combining unsubsidized loan, need based aid, and 20 grand exceeds this year's cost of attendance.

But I am afraid that this could adversely affect my need-based aid or fafsa loan status for this year and even future.


What should I do? I really would like to do my best to not to affect my need-based aid
Should I report this to my school and adjust the loan amount?
Should I just use this money after I receive my loan and aid and then pay off the loan using the money during the first year?
Should I keep this money until I finish medical school and then use it to pay off the loan?

Assuming the need based aid is a grant?
Use the the 20k instead of taking the unsubsidized loan, whatever you have left over, rinse and repeat the next year.

 

[clubwestpua]

Well you could just take out slightly less in loans each year.... like 5k less. And use the money your fam gave you to pay for living expenses - in cash. Not sure about the ethics of this since I don't get need-based aid, but seems like an option.

Say your tuition + fees is 55k and you need 20 for living expenses. Total = 75k. Now try to manuever it so that aid + loans = 70k.

So is it possible to adjust the amount of loan he or she receives without affecting the need based aid during this year and subsequent yrs?



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[TheBossDoctor]

Definitely don't let the school know you got a $20,000 gift from your grandpa. Just tell them you're not interested in the unsubsidized loan.

 

[snowflakes]

Don't you have to report money paid on your behalf on FAFSA? If so, wouldn't the $20k this year affect next year's grant award?

 

[allantois]

Please, the gift that you receive from your grandfather is between you and him and none of the school's business. It is his gift to you, not a change to your or your parents' income. I doubt very much that your school will care if you don't take out your unsubsidized loan (just make sure to reject it or take a lesser amount). My school keeps offering me that kind of loan each year but I just keep rejecting it. So far they haven't cut on my (or anyone I know) other aid.

 

[amad01]

why not put the 20 grand down in cash towards the first year of school? Won't that first year be the one building interest the longest? I have 20,000 in savings and was going to put it towards my first year.....

 

[V5RED]

Please, the gift that you receive from your grandfather is between you and him and none of the school's business. It is his gift to you, not a change to your or your parents' income. I doubt very much that your school will care if you don't take out your unsubsidized loan (just make sure to reject it or take a lesser amount). My school keeps offering me that kind of loan each year but I just keep rejecting it. So far they haven't cut on my (or anyone I know) other aid.

If he is getting need based aid, it is the school's business. That kind of thing goes on your FAFSA.

That said, I doubt most people would report it. My advisors at my UG told me to underreport things so I could get more aid, and I assume they told others to do the same. That said, I reported everything since getting a felony seemed to outweigh extra aid money to me.

 

[Annabell Lee]

"is willing to offer".
So you haven't received this money yet?
I second talking to your financial aid officer. They are there to help you, and aren't looking to get anyone's aid cut.
If you talk to them they can help you figure this out or use the money in a way that wont negatively impact your aid. Generally there are loopholes for assistance from grandparents, which is why everyone will tell families to put college savings accounts in the grandparent's name instead of the parent's.
Have your grandpa hold onto the money for now so you can honestly say he has "offered" the money instead of "I have 20k right now what should I do?"
If this money would effect your EFC, then he could probably break it up and give you 5k/year, which would be less likely to significantly reduce the aid you are eligible for.

$20k is a very generous gift and will help you a lot, but in the grand scheme of things probably wont effect your aid too much, especially if you are smart about how you use it.

If your financial aid officer tells you it will significantly cut your aid, you can always ask your grandfather to hold onto his money until you graduate, and then give it to you to pay off some of your loans.

 

[LMBLBM]

I wouldn't report. You don't even have to report this to IRS. I think annual reporting threshold for this year is 150k.

Now for ethical reason, you received this gift after you honestly filled out your financial data. They cannot force you to use your gift money to pay for your tuition. What if you need to buy new car tomorrow? Do not report. No one will care.