Student Loans/BBB question

[frankballman]

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Hi everyone,

Not sure if there is already a thread on this, and I just couldn't find it.

I am finding conflicting information online, and I was wondering if anyone could give me advice. I have a few questions on student loans. I apologize in advance if these are silly questions...

1. Loaded question, but grouping these all together: Do most students use the direct unsubsidized loan ($20,500/year), and then use the grad plus loan for additional costs? I know this is changing with the BBB, so are veterinary programs considered "professional" programs, where we can borrow $50,000 per year? Additionally, if I borrow prior to July 1, will I still be eligible for the grad plus? Which is more advantageous for in-state tuition, where cost of attendance is estimated at $50,000 per year?
2. When do I need to apply for a loan by for fall matriculation? How long does it take to get said loan?
3. Similar to the last question: I am applying for scholarships, but do not know when I will hear back/if I will even get any. Should I wait to apply for loans until after I hear back?
4. How has the BBB affected repayment options, and loan forgiveness? Assuming I graduate ~ $150,000 in debt, should I consider paying it as quick as possible, or explore other options for forgiveness?

Thank you in advance for your advice!

 

[SkiOtter]

Additionally, if I borrow prior to July 1

When do I need to apply for a loan by for fall matriculation? How long does it take to get said loan?

If you are starting classes in the fall (August/september) you will not be borrowing prior to July 1st. You can fill out FAFSA and everything and tell them how much you want, but you don’t actually get the money until the fall and that’s when your borrow date is.

 

[JaynaAli]

Hi everyone,

Not sure if there is already a thread on this, and I just couldn't find it.

I am finding conflicting information online, and I was wondering if anyone could give me advice. I have a few questions on student loans. I apologize in advance if these are silly questions...

1. Loaded question, but grouping these all together: Do most students use the direct unsubsidized loan ($20,500/year), and then use the grad plus loan for additional costs? I know this is changing with the BBB, so are veterinary programs considered "professional" programs, where we can borrow $50,000 per year? Additionally, if I borrow prior to July 1, will I still be eligible for the grad plus? Which is more advantageous for in-state tuition, where cost of attendance is estimated at $50,000 per year?
2. When do I need to apply for a loan by for fall matriculation? How long does it take to get said loan?
3. Similar to the last question: I am applying for scholarships, but do not know when I will hear back/if I will even get any. Should I wait to apply for loans until after I hear back?
4. How has the BBB affected repayment options, and loan forgiveness? Assuming I graduate ~ $150,000 in debt, should I consider paying it as quick as possible, or explore other options for forgiveness?

Thank you in advance for your advice!

1. Historically yes, people took out direct first then gradplus. Because the direct loan have better terms like lower interest rates than GradPlus.
Yes, vet med is considered a professional degree, so starting this fall, students can take out $50,000 in federal direct loans per year for a total of $200,000 and grad plus will no longer be an option. If you need more than 50k per year (for tuition, living expenses, or whatever), you will have to find alternative funding options like private loan, savings, scholarships, or borrowing from friends and family.
Current expectations that if the program begins before July, you will still be able to borrow under the old rules where you can still have access to gradplus, but the date you apply has no bearing, it’s about program start date. If your program starts in the fall like most this will not be an option for you.

2. Doesn’t really matter when you apply. Sometimes earlier is better for need based grants and scholarships, but if you’re just taking out the federal loans, there’s no need to apply early; you’re guaranteed to get them. You can apply as soon as you know where you’re going or you can wait until the summer. Loans pay out the first week or two AFTER classes start.

3. Scholarships are handle by the schools or private organizations and are unrelated to federal loans. Even if you apply for loans now, you can change how much you’re accepting and you can even return extra loan money towards the end of the semester if you’ve taken more than you needed.

4. The BBB changed loan repayment very significantly. New borrowers can’t use any of the existing income based repayment plans, they have to use a new RAP program. This is income based, but for most veterinary graduates will have higher payments compared to existing programs and RAP has a longer repayment term (30 years vs the previous 20-25) which also increases your total paid. One benefit of RAP is an interest subsidy, so if your payments don’t cover all the interest, they waive additional interest after your payment so your balance doesn’t grow unchecked like it used to on previous income based plans. But the trade off for that was higher payments and longer repayment terms. Forgiveness is still taxable, so you have to prepare and save money because when loans are forgiven, you will owe more in taxes that year because your income looks higher on paper. Or you can use a standard 10 or 25 year plan where you repay loans to zero. If you’re truly only borrowing 150k, paying to zero is very realistic, but we don’t know your finances or what else you’re paying for. But that low of a balance is getting more and more rare.

And if people are taking private loans out, that repayment is on top of the federal loan repayment options and terms are usually even worse (no forgiveness option, higher interest rates, etc).