Student Load Question

[Taskha]

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If I apply to the federal loan, can I take the $200k one time? Do I have to pay the same APR if I pay back the loan earlier?
I really want to do some stock investment. I find myself a good short term investor and I don't want to miss the bull market this year.
I am financially dependent and won't necessarily need the loan, but I want to use it if it's a good deal.

 

[chaim123]

If I apply to the federal loan, can I take the $200k one time? Do I have to pay the same APR if I pay back the loan earlier?
I really want to do some stock investment. I find myself a good short term investor and I don't want to miss the bull market this year.
I am financially dependent and won't necessarily need the loan, but I want to use it if it's a good deal.

no. There are disbursements per year that will give you enough money to live off of. You can't take out your entire 4 year balance at once. You get up to the cost of attendance minus any scholarship or parental contribution. There are also caps on how much Direct Federal Loan you can take out per year, and above that you will get Grad PLUS which has higher interest rates.

There generally isn't enough left over after living to invest or save that is worth the unsubsidized interest.

 

[alm414]

I can’t believe this needs to be said but do not invest your medical school loans on short term investments

 

[DNAJB6]

This is a horrible idea. Buying on the margin with any investment is always risky. Buying on the margin illegally using student loan proceeds that are (largely) non dischargeable in bankruptcy is a beyond stupid plan. And no you don't take the full $200k at a time. You are capped each year at the cost of attendance.

 

[GreenDuck12]

I think your missing some fundamental understandings of how student loans work and what the purposes are. First, you can borrow up to the estimated cost of attendance less any (institutional) scholarships or grants you receive. That money will be distributed each term, typically quarterly, as determined by your financial aid office. The loans will first be applied to your outstanding balance - tuition and fees. You then receive a disbursement from remaining funds that are typically for your cost of living. What you choose to do with those funds is up to you. Generally speaking, the CoA is enough to afford a one bedroom apartment near school with a moderate amount for travel and other necessary expenses. Typically one might encounter an excess of $5000 per year. One can of course choose to live in a more frugal or lavish arrangement which would affect the amount of disposable cash one has on hand. Maybe one or two thousand per quarter. This simply is not sufficient to earn sums of money to make this worth the risk or the time needed. Once you factor in the loan origination fees (for grad plus), interest accrual, and taxes on short term gains, it’s unlikely you’ll end up in a significantly improved financial position. You’ll also be in med school - let it be your priority.

 

[viralhiker]

As someone who has racked up an obscene amount of federal loan debt just to make ends meet and finance my undergraduate education, this post has me feeling some type of way.

OP, I seriously can’t find the words to say how stupid of an idea this is, as well as how borderline offensive/naive you come off to suggest that this could be a way for you to game the system that millions of less-fortunate student borrowers depend on.