RVU and Sallie Mae???
Started by westphi
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During my interview they were saying that they think Sallie Mae's new interest rates are not fit/unreasonable for their students and that RVU was working on a plan to provide students with loans at interest rates comparable to the federal aid programs
I was impressed that RVU is going to come up with a alternate to Sallie Mae. They could have easily just told us to deal with it, but instead they're going way out of their way to make a reasonable solution.
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That would be awesome. Lets keep our fingers crossed!!!
Its that word: "reasonable" that scares me...Guess we'll just have to keep the faith
I'm sure they'll pull through in a good way. Just imagine if they agreed with Sallie Mae on 'reasonable.' Right now, Sallie Mae's definition of reasonable is actually comical because it's so absurd.
I'm sure they're going to go to bat for you guys but if they can't pull it out, don't be too hard on them - we're facing one of the worst economic
credit crunches ever.
Sure, but funding medical education has got to be one of the best investments a lender could think to invest in. I know its a lot of money--but do doctors default on their loans???
Historically yes (from what I understand), doctors do default.
hate to say it, but this is one of the reasons why many people are skeptical of the RVU model.
Haha...this is a pretty silly statement. Sallie Mae is a pretty small part (and probably won't even be used at all next year, which would make it no part) of this "model" you are referring to. These arguments people have against the school (private loans, accredited, newness, etc etc) have nothing to do with what is most important of the school...the education.
In one of the old LMU-DCOM threads, someone said that the school was required to have money saved away equal to the amount of tuition for everyone for their four years before they could even open. If that's a general requirement for new COMs, as a contingency in case they fail, then maybe RVU-COM is sitting on a similar pile and can't risk that investment by blowing off problems for its students.
so theyre using that money they have saved to help "fund" the students now?
That's just silly. It's new school thing. And seeing as the chancellor has a lot of money, it's actually a positive in this case, because he can help finance, if need be. Either way, it will be resolved soon and nobody will need to worry.
3dee said:
No, they're not to that point. It is very unlikely that money will need to be used. What you're referring to is used if the school folds and they have to pay tuition to other schools to transfer the students.
One of their possibilities right now is to finance the students (AKA the RVU version of Sallie Mae, but without the ridiculous terms). But nothing is for sure yet, they're still making sure to seek out the best option for the students.
Of course they do. Hopefully the default rate is below average but....well, stuff happens. 😉
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HAHA That might be the most naive thing I've ever read.
you keep telling yourself that chief. RVU runs on the same model as every other for-profit school (De-Vry, U of Phoenix, etc.). Student loans are the life blood of these business models. If the loan spigot is turned off, look for next years class to be heavily skewed towards students who can pay out of pocket, thus shrinking the pool of applicants and driving down the quality.
De-Vry, U of Phoenix..those are some quality institutions! Aren't all for profit schools pretty stellar? 😛
Seriously though, it's not worth arguing with the RVU'ers. They've made their bed...let's just hope it remains "their" bed!
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Student loans are the life blood of every medical school in the country, it's too expensive to not have loans. The only difference is that RVU, since it is a new school, has to wait for a few years to get the loans from Title IV.
I don't understand why you think the 'quality of the applicants' is going down. Unless you imply that only poor quality students take out private loans. Let me know your logic....
MaximusD said:
What about it? You think that's why Sallie Mae changed it's terms or something? Or are you just anti-RVU? I think you miss the point that the profit status has nothing to do with loans. All I know is that I've got student loans just like you, and I'm learning the same stuff you are. Where's the problem?
I'm not trying to convince anyone that RVU is the greatest place ever. Obviously I love it, but it's not for everyone.
I just want to have the facts available. You all can throw around opinions, good or bad, that's what this site is for. I'm just trying to clear up discussions that aren't well informed or inaccurate.
You don't have to like RVU or its model. But I don't think school bashing gets anyone anywhere. But I'll tell ya what. If we blow it on the boards in a year, bash away. Tell us what a horrible decision we made to go to RVU. Until then, accept RVU as a colleague medical school that gets the same education and opportunities that yours does, because that's what it is.
As for our current loan situation, we'll see what the administration comes up with in the next few weeks. I'll be sure to make a big, shiny new thread that you can criticize to your hearts content. Who knows, I might even become an RVU loan hater too.
I just want to have the facts available. You all can throw around opinions, good or bad, that's what this site is for. I'm just trying to clear up discussions that aren't well informed or inaccurate.
You don't have to like RVU or its model. But I don't think school bashing gets anyone anywhere. But I'll tell ya what. If we blow it on the boards in a year, bash away. Tell us what a horrible decision we made to go to RVU. Until then, accept RVU as a colleague medical school that gets the same education and opportunities that yours does, because that's what it is.
As for our current loan situation, we'll see what the administration comes up with in the next few weeks. I'll be sure to make a big, shiny new thread that you can criticize to your hearts content. Who knows, I might even become an RVU loan hater too.
Not sure how paying out of pocket lowers the overall quality????? Heck, I guess the fact that my parents paid for my undergrad education really lowered the quality of that school as well then...who'd have thought
For-profit schools are especially susceptible to disturbances in the loan market. If loan money is scarce, only students who can afford to pay out of pocket will attend, thus reducing the applicant pool and the quality of student. One can envision a scenario where applicants are favored in the admissions process if they can pay over applicants who needs outside financing (which may be unavailable or prohibitively expensive). Furthermore the model established by RVU demands that they go with the 'safer' payday and take the guaranteed tuition dollars over a student whose funding source may be cut-off (like sallie mae)
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Interesting idea. And I do see where your scenario would fit... which would be a school at which the students can't get loans, so only the rich kids apply. However, loans are not scarce at RVU. Our loan availability will be just like the other schools, so I don't think your situation applies here.
I, for example, and what you might call dirt poor right now. My loans pay for school, rent, books, lunch, everything. And RVU doesn't ask anything about your financial situation during the interview or application, so they are trying to weed out the rich folk.
If they don't offer loans in the future (which is super unlikely), then your model is probably going to fit. That would suck for any school if that happened.
RVU is THE only new school that has to wait a few years to get loans. All other new schools are designated as non-profit. As such they all receive their loans at latest 6 months after classes begin. And that is only for the very first year of existence for the school, after that all loans on are the normal schedule. Only for-profit schools must wait the full four years before being eligible.
Actually i think if the school isn't affiliated with an existing institution that has some form of accreditation already, such as an undergrad program, then the school has to wait until it receives full accrediation (4 years b/c 1st class has to graduate) before it is eligible for federal student loans. This was going to be an issue at TCMC, a new MD program, which is a non-profit.
This is a very naive perspective. There should never be tolerance that an institution's standard of medical education will be sub-par. This would otherwise just be criminal, and is not the topic on hand. Its all the other factors that determine if a school is acceptable or not. There are some very interesting studies (some of which are even posted on SDU) that correlate student debt to many detrimental aspects of the delivery of healthcare and people's lives...
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Haha. Sallie Mae may not even be used at all next year so it's stupid to think that it is some major part of the "model." I think Boone is one of the few on this thread that knows what he/she's talking about because he/she is actually paying with the loans provided. He/She says its not a problem, so I wouldn't worry about it. But hey, I guess you already know all that though because I'm the "naive" one.
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Wow the dribble here may need a napkin. RVU does not run on the same model as every for profit. That is like saying that all businesses run on the same model. RVU has set up two seperate entities one for the physical property and one for students. Both of these entities are overseen by a board of trustee's (non-paid) which are highly respected officials both locally and nationally. Oh wait is this the boiled down version of if you make money you can't be philanthropic. My bad I didn't sense the sarcasm.
I think you mean drivel, not dribble.... ANYWAY... Actually all for-profit corporations DO run on the same model. Investors invest and corporations pay dividends out of their profits. It is illegal for the corporation to not act in the best interest of the investor. Now, I am not against all corporations. However, some things run better when they are not driven by profits (think the post office, fire department, or medical schools).
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Anyone???
An education at RVUCOM is already expensive with a cost of attendance of about $65,000 for out of state persons. Only three scholarships are offered each year.
add a 8.5% loan for $260,000 (four years of cost of attendance) and assume it takes the full 20 years to pay off.
Monthly payment = $2256 Total paid in 20 years = $541,440
This is assuming that you make full payments during residency (which you have the option to not do), and that your principal does not accrue interest in medical school (which it does).
Conclusion--if a student takes the full amount of time to pay the loan, their cost of attendance doubles to over half a million dollars.
So to answer your question, no, I don't think these costs are fair to the student. RVUCOM saw that they could make A LOT more money financing their student's education. RVUCOM is a business, this is a good business decision. If a student were to take out government or other private loans, the school would only get at most 50,000 dollars per year in tuition plus fees. Under this system they are poised to take in over $100,000 per year, per student. This opportunity was too much for the school to pass up.
Paying $500,000 dollars to become a doctor may not be the best choice for everyone.
add a 8.5% loan for $260,000 (four years of cost of attendance) and assume it takes the full 20 years to pay off.
Monthly payment = $2256 Total paid in 20 years = $541,440
This is assuming that you make full payments during residency (which you have the option to not do), and that your principal does not accrue interest in medical school (which it does).
Conclusion--if a student takes the full amount of time to pay the loan, their cost of attendance doubles to over half a million dollars.
So to answer your question, no, I don't think these costs are fair to the student. RVUCOM saw that they could make A LOT more money financing their student's education. RVUCOM is a business, this is a good business decision. If a student were to take out government or other private loans, the school would only get at most 50,000 dollars per year in tuition plus fees. Under this system they are poised to take in over $100,000 per year, per student. This opportunity was too much for the school to pass up.
Paying $500,000 dollars to become a doctor may not be the best choice for everyone.
Aren't federal loans pretty close to the RVU plan?? I was under the impression that part of the federal loans (like only $8000) you did not have to pay interest on during medical school and the rest (around $32,000) interest is compounded (either weekly or monthly...I can't remember).
But it does stink that the school isn't trying to help out its students more and try and make the interest rates lower...Oh well I guess, there goes the primary care idea lol.
But it does stink that the school isn't trying to help out its students more and try and make the interest rates lower...Oh well I guess, there goes the primary care idea lol.
That makes a lot of sense. However, there are opportunities, in Colorado especially, to pay off your debt quickly. Granted, the best loan-forgiveness options will only pay off 30-50% of the debt that we would accumulate at RVU.
It seems as if RVU is poised to produce family practice doctors, but its tuition/costs are so prohibitive that most students will have to become specialists. Once you figure taxes and student loan debt into potential annual salary, you'll be taking home less than half.
And people were worried that RVU was not going to have the students' interest in mind and that they would turn predatory eventually. Who knew eventually was 6 months
$8500 of federal loans are interest free every year. The rest are 6.8% interest.
So for the 260,000 you take out, over 4 years factoring in the 8,500 per year interest free your total paid over 20 years for the loan of 260K will be 448,000 compared to 541,000 at 8.5% interest
10 years- US gov't loans- $346,097.62
10 years RVU loans- $386,835.21
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