Student loan interest accrual restarts September 1st, what to do

[MateoGM416]

Student federal loan interest apparently starts accruing again today. I have no idea how of that works cause no one in my family are physicians, and I am taking out 60k a year, which is the max amount you're allowed to take out at my program. Should I come up with a budget and give back what I am not going to use this year? I'm getting no guidance from my school either. I'm posting this thread in case anyone else is worried about this, if there is a reason to be worried.

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[Drjc1977]

Student federal loan interest apparently starts accruing again today. I have no idea how of that works cause no one in my family are physicians, and I am taking out 60k a year, which is the max amount you're allowed to take out at my program. Should I come up with a budget and give back what I am not going to use this year? I'm getting no guidance from my school either. I'm posting this thread in case anyone else is worried about this, if there is a reason to be worried.

The only reason to worry is if you chose not to pay it back. If you do not need all or part of the loan money, give it back. If you have questions about your loan(s), you should contact your lender.

 

[GoSpursGo]

Your school can't advise you on how much money you're going to need this year beyond the cost of tuition. The rest is on you to budget appropriately. It is not unreasonable, though, to ask for a high number this year, see how much you are actually spending this year, and then request less next year once you have a better sense of how much money you actually need.

 

[voxveritatisetlucis]

I mean how much do you need that’s not tuition related? If you’re only going to be returning like 3000 then just keep it. It’s nothing in the grand scheme of things and having liquid cash will be important for away rotations and such

 

[MateoGM416]

The only reason to worry is if you chose not to pay it back. If you do not need all or part of the loan money, give it back. If you have questions about your loan(s), you should contact your lender.

Your school can't advise you on how much money you're going to need this year beyond the cost of tuition. The rest is on you to budget appropriately. It is not unreasonable, though, to ask for a high number this year, see how much you are actually spending this year, and then request less next year once you have a better sense of how much money you actually need.

I mean how much do you need that’s not tuition related? If you’re only going to be returning like 3000 then just keep it. It’s nothing in the grand scheme of things and having liquid cash will be important for away rotations and such

The max amount we could take out was 84k, tuition is 54k, and I spend about 10k every year on rent and living expenses, leaving roughly 20k left in loans. Should I give 10-15k back? Not sure what a safe amount to have is

 

[voxveritatisetlucis]

If that’s the case then I would return what you don’t need. I thought you were taking like a couple grand

 

[MateoGM416]

If that’s the case then I would return what you don’t need. I thought you were taking like a couple grand

They told us to err on the side of taking the most you can and just paying it back whenever, but I think they thought that student loan interest wouldn't start accruing again so soon

 

[chilly_md]

They told us to err on the side of taking the most you can and just paying it back whenever, but I think they thought that student loan interest wouldn't start accruing again so soon

Your school should have known the details about loan interest resuming months ago. I assume they just generally advise people to err on the side of having more to avoid people coming into the office with issues mid-semester.

 

[GoSpursGo]

They told us to err on the side of taking the most you can and just paying it back whenever, but I think they thought that student loan interest wouldn't start accruing again so soon

This has been the advice ever since I was in school 15 years ago. You would much rather take out a little more than you need and give it back after accruing a trivial amount of interest than to run out of money midway through the year due to something unforeseen. While it would have been nice for the reprieve to last a little longer, it is ultimately unsurprising that it has resumed, so I doubt anyone was giving advice based on wishful thinking.

 

[WhereMyLiberalsAt]

Your school can't advise you on how much money you're going to need this year beyond the cost of tuition.

Well that’s not really true… COA calculates averages amongst students COL. This sets how much you can qualify for. So the school for sure has some ballpark.

OP, I’m like 90% sure your school has services to help you with this. My school gives zoom meeting like once a month on financial planning and budgeting. I was under the impression that they were forced to provide this, because my school is dog $#!£ and would never just help the students unless forced too.

 

[GoSpursGo]

Well that’s not really true… COA calculates averages amongst students COL. This sets how much you can qualify for. So the school for sure has some ballpark.

I mean yes of course COL exists, but as you said it’s an average that may or may not approximate what a specific person needs. And this is why, in year 1, it is likely wise to err on the high side until you figure out how much YOU specifically need.

 

[AlbinoHawk DO]

Student federal loan interest apparently starts accruing again today. I have no idea how of that works cause no one in my family are physicians, and I am taking out 60k a year, which is the max amount you're allowed to take out at my program. Should I come up with a budget and give back what I am not going to use this year? I'm getting no guidance from my school either. I'm posting this thread in case anyone else is worried about this, if there is a reason to be worried.

Take it all out. The new rules from the government say that if you pay the minimum, your remaining interest will be forgiven, even if your expected payment is zero. For example, you have $50 of interest and you pay $75, $25 will go to the loan and $50 to the interest. However, if you have $50 of interest but your minimum payment is $1, you will have the remaining $49 for that month forgiven and won't accrue

 

[MateoGM416]

Take it all out. The new rules from the government say that if you pay the minimum, your remaining interest will be forgiven, even if your expected payment is zero. For example, you have $50 of interest and you pay $75, $25 will go to the loan and $50 to the interest. However, if you have $50 of interest but your minimum payment is $1, you will have the remaining $49 for that month forgiven and won't accrue

But when am I supposed to start paying the minimum?

 

[AlbinoHawk DO]

But when am I supposed to start paying the minimum?

That's the beauty of it. It doesn't matter. If you start "paying" on SAVE during school, because you're earning zero dollars, your payment will be zero and interest waived. The same for first year of residency because they will count your 4th year income. You will effectively pay money on PGY2