Questions about paying for med school?

[zempa]

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My main question is concerning loans. I know nobody wants to take on loans and I was wondering the reasons for this.

 

[LRAccord624]

High interest rates. They can make your $150,000+ worth of debt turn into much, much more.

 

[AlexB]

High interest rates. They can make your $150,000+ worth of debt turn into much, much more.

hence the reason you are generally advised to pay off these loans as soon as feasibly possible, rather than paying them over a series of decades as lendors will take a pretty penny.

 

[organdonor]

If for some reason you wouldn't graduate you would be stuck with no way to pay it off. If you are married and die before you pay back your loans your spouse will be burdened with hundreds of thousands of debt with no way out ( not even bankruptcy). For any literalists out there the bible is not too fond of Usury (interest). Loans are a necessary evil for 90% of student doctors.

 

[red10]

My main question is concerning loans. I know nobody wants to take on loans and I was wondering the reasons for this.

because you have to pay them back...and paying back lots and lots of money sucks

 

[Electronegative]

If for some reason you wouldn't graduate you would be stuck with no way to pay it off. If you are married and die before you pay back your loans your spouse will be burdened with hundreds of thousands of debt with no way out ( not even bankruptcy). For any literalists out there the bible is not too fond of Usury (interest). Loans are a necessary evil for 90% of student doctors.

When you die your federal loan debt dies with you. I just took the enterance counseling few months ago and it was part of the Q & A.


EN

 

[MossPoh]

If for some reason you wouldn't graduate you would be stuck with no way to pay it off. If you are married and die before you pay back your loans your spouse will be burdened with hundreds of thousands of debt with no way out ( not even bankruptcy). For any literalists out there the bible is not too fond of Usury (interest). Loans are a necessary evil for 90% of student doctors.

As noted, if you die federal loans are forgiven from what I'm aware of.

Also, the bible thing is the reason Jews got so invested in banking and the negative viewpoint in some areas. Nothing against usury for them and since they weren't allowed to own land, that was one of the few areas to make money.

 

[organdonor]

When you die your federal loan debt dies with you. I just took the enterance counseling few months ago and it was part of the Q & A.


EN

Can you back this up? If you take out loans while you are married how is your debt not your spouses debt, just as your income is your spouses income, like in a divorce settlement?

I was advised (by an insurance salesman, I know) to purchase life insurance for this reason. I don't want to leave my spouse to pay my huge debt on her meager income.

I realize that any federal debt you take out prior to the marriage would die with you, although I'm not so sure on private loans after a quick google search.

 

[auburnO5]

Can you back this up? If you take out loans while you are married how is your debt not your spouses debt, just as your income is your spouses income, like in a divorce settlement?

I was advised (by an insurance salesman, I know) to purchase life insurance for this reason. I don't want to leave my spouse to pay my huge debt on her meager income.

I realize that any federal debt you take out prior to the marriage would die with you, although I'm not so sure on private loans after a quick google search.

As others have said, when you die, your federal loans die with you. This is 100% fact.

However, if you consolidate loans with your spouse (which you should NOT do), then your spouse will be responsible for all your loans if you die.

 

[Electronegative]

All loans received under programs authorized by Title IV, of the Higher Education Act can be canceled for several different circumstances including: (1) in the event of your death; or (2) if you become totally and permanently disabled after the loan is disbursed.

http://www2.ed.gov/offices/OSFAP/DCS/loan.cancellation.discharge.html


EN

 

[ThaliaNox]

Can you back this up? If you take out loans while you are married how is your debt not your spouses debt, just as your income is your spouses income, like in a divorce settlement?

I was advised (by an insurance salesman, I know) to purchase life insurance for this reason. I don't want to leave my spouse to pay my huge debt on her meager income.

I realize that any federal debt you take out prior to the marriage would die with you, although I'm not so sure on private loans after a quick google search.

Ooooops! Someone got duped by an insurance agent!

I do know that physician income can become contentious in a divorce situation, especially if one spouse supported the other while in med school. That can bite your income for many years. Understandably, on some level, but certainly frustrating on others.

 

[zempa]

I'm sorry but basically this is the situation: My father had promised to pay for med school, now under the advisement of his accountant he wants me to take out loans, because somehow this will be profitable for them and me. I don't understand this reasoning but don't know enough to argue. Can someone please help.

 

[Electronegative]

Profitable for them YES, Profitable for you, I don't see how 7% interest rate on 150K is profitable.


EN

 

[BerlinDude]

I'm sorry but basically this is the situation: My father had promised to pay for med school, now under the advisement of his accountant he wants me to take out loans, because somehow this will be profitable for them and me. I don't understand this reasoning but don't know enough to argue. Can someone please help.

Reasoning: Maybe they want you to take interest free loans (as much as you can) while they collect the interest on the money they have. Either that or they want to keep their money without explicitly telling you to get lost.

 

[DirtyJustice]

Profitable for them YES, Profitable for you, I don't see how 7% interest rate on 150K is profitable.


EN

Assume 5% inflation. That makes your real interest rate 2%. In addition, people always discount the future, so that ~180k (after compounding interest) really isn't that bad.

It is actually better than paying the 150k upfront now. Loans can actually help the debtor; in some cases of course.

 

[ThaliaNox]

I'm sorry but basically this is the situation: My father had promised to pay for med school, now under the advisement of his accountant he wants me to take out loans, because somehow this will be profitable for them and me. I don't understand this reasoning but don't know enough to argue. Can someone please help.

Chances are that they are referring to you taking out the subsidized loans at 8500 per year. These do not acrue interest during med school. Perhaps he wants you to bank those, take the interest and then pay them back when you graduate, essentially getting a free loan.

 

[Damia]

.

 

[red10]

prob if your parent took out the loan, he'd have to start paying interest almost right away. you can defer yours until after school and or go into forbearance during residency.

 

[Penner]

If for some reason you wouldn't graduate you would be stuck with no way to pay it off. If you are married and die before you pay back your loans your spouse will be burdened with hundreds of thousands of debt with no way out ( not even bankruptcy). For any literalists out there the bible is not too fond of Usury (interest). Loans are a necessary evil for 90% of student doctors.

Life insurance.