Student Loans vs Savings

[formerastrosfan]

Hello all,

I have recently been accepted into a podiatry program starting this fall. I am a non-traditional student and have worked for a few years prior to applying to podiatry school. I have saved up just about enough to pay out of pocket for my tuition and living expenses over the course of the next four years, but after that point I will be close to broke.

I have spoken to some DPM's and they have mentioned the possibility of a "Loan Forgiveness" plan that would essentially clear all of my student debt. Does anyone know how exactly that works? Or how difficult it is to receive loan forgiveness? Any insight would be appreciated, thank you!

---

Members don't see this ad.

 

[Podstar]

If you have enough to pay for it and not have any loans, do it.

 

[heybrother]

(1) Awesome job saving.
(2) The next election will provide some answers in the short term. There are candidates who intend to forgive it all. Reality may change 4 years at a time. There will be a lot of frustration among people who paid it off if it all just goes away.
(3) Forgiving graduation student debt is going to be a hot issue - we account for a lot of it. We tend to be higher earners.
(4) Here's the current reality if nothing changes - your best case forgiveness is a 10 year plan and it requires you to work for a non-profit. Essentially that means 3 years of residency (very possibly at a non-profit or what not) followed by 7 years somewhere that counts. Private practice will not count. You'll have to work for an organization. You'll have to devotedly keep track of your service/status to ensure your months are adding up and ensure your employer is the right type. There are horror stories of people working for non-profits only to find out they didn't qualify. The people who just became eligible for forgiveness found out that many didn't qualify - they didn't work for the right people, they didn't have the right loans etc. Its a process. You have to ensure you do it right. With a large amount of our profession going into private practice the likelihood you'll have a job that earns you forgiveness on a 10 year time table is probably low. You can try for it. You can aim for it. But when the time comes, even if you have it set up perfectly you may have to ask yourself - would I rather have been somewhere else, worked somewhere else, etc.

The other thing is - you don't have to pay it all lump sum. You can borrow a little or a lot. You can pay tuition but pay cost of living out of your own money. You could borrow some and fund a ROTH each years to make sure the space isn't wasted. You have flexibility. Your biggest win is not to take the higher % loan - in my days there was the standard loan at like 5-6.8% and a separate class of loan at like 7.6% - the 7.6% loan came with a 4% origination fee so if you avoid taking any loan at that rate you immediately save 4% the year you don't take it.

 

[formerastrosfan]

Thank you so much. I appreciate all the information. I will definitely be paying attention to the issue as it comes up for this next election. Thank you for the advice!