Student Loans

[SMC2UCLA2_]

I was talking to my dad about our investments today and he is thinking of transferring my holdings to my name to save in taxes. His main concern however is that this will affect my student loan eligibility for medical school.

When applying for medical school loans, will my holdings affect the type of loans I can obtain? Will I have to pay anything upfront due to my holdings?
I have looked into medical school loans for a bit and it seems that my holdings may affect my Federal Subsidized loan eligibility but not the unsubsidized loans.

I am currently dependent on my parents but I read on this forum that all medical students are considered independent for FAFSA. I'm wondering what is the best way to handle my loans. I do not want to pay anything up front since the interest rate is so low; I would rather let my brother invest it since he averages 20% lately and pay off my loans later. Is there anything I can do to increase the total amount of subsidized loans I get?

Input on your experience with loans is greatly appreciated.

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[Winged Scapula]

Moving to Financial Aid Forum...

 

[carol ann]

i am sure that there are other people around who can do a better job answering your questions....here's my take on things though.

1. having the investments in your name (depending on the type of investment) will increase the EDC which is your expected contribution prior to stafford loans, hence decreasing your eligibility for federal loans...however, some people try to bridge the gap with private loans, other just make do with the lesser amount of money, particularly if your school has a generous cost of living stuff.

2. Generally, for FAFSA(and hence loan eligibility) you are considered independent of your parents. However, many schools request parental information to determine eligibility for grants or scholarship. Personally, I am a married mom and I refuse to ask my parents for tax information, so I have to write a letter to my financial aid officer to formally let them know that I decline to provide that information...Some terms I have gotten grants, others I have not.

Just a brief answer until a time when someone more knowledgable can post a response.

 

[mpp]

Having some savings may decrease your eligiblity for subsidized loans. You will still be eligible for the maximum in unsubsidized loans ($38,500 per year).

Transferring money to someone is a taxable event. Your father can't just put things into your name without reporting that to the IRS. Any amount transferred to you over $11,000 per year will be taxed, unless that money is used to pay for tuition directly (i.e., you father pays the school directly).

 

[SMC2UCLA2_]

Transferring money to someone is a taxable event. Your father can't just put things into your name without reporting that to the IRS. Any amount transferred to you over $11,000 per year will be taxed, unless that money is used to pay for tuition directly (i.e., you father pays the school directly).

Yes I am sure he is aware of this. He mentioned the easiest way to do this was to open another investment account in my name and make monthly installments until it was equal in value to my other holdings and then perhaps even continue with some of his investments in this account.

So having holdings in my names will not increase my expected contributions prior to staffor loans? I don't want to make any contributions. I will be loan free when i start and $38500 yearly will be more than enough to cover my expenses.

I'm also wondering if it would be better to leave it in his name so I can qualify for some subsidized loans though the amount is preety minimal (around 8k a year?)

 

[mpp]

$8,000 in savings will not disqualify you from subsidized loans. Although you will have an expected family contribution, you can still take out the full annual budget (up to $38,5000) in unsubsidized Stafford loans if you want. Your school's fianancial aid office might not be encouraging of this, but they should allow it.

 

[SMC2UCLA2_]

$8,000 in savings will not disqualify you from subsidized loans. Although you will have an expected family contribution, you can still take out the full annual budget (up to $38,5000) in unsubsidized Stafford loans if you want. Your school's fianancial aid office might not be encouraging of this, but they should allow it.

My savings are about 50k now and prob around 75k by the time I apply for loans. What I meant was that subsidized stafford loans only cover up to $8000 a year from what I read. Any loan amount greater than $8k yearly will come from unsubsidized Stafford loans for a total of up to $38,500.

Any idea on the qualifications to get the full $8,000 yearly in subsidized stafford loans?

 

[blotto geltaco]

When I entered medical school I had some pretty substantial savings from a chunk of stock that was bought a long time ago and did well over time. I also have some ral estate in my name that has been in my family for years. Although I did not take out the max loan amount every year of school, there was at least one yar when I took out the whole $38,500. In other words, having assets didn't affect my ability to get the full amount on loans.

 

[mpp]

The qualifications for the $8,500 in subsidized loans vary since the school is given a certain amount of subisidzed loan money to disburse. They cannot give any one student more than $8,500 per year. They choose the neediest to give the subisidized loans too (although they do not take into account parental information even if you include it on your FAFSA). $75,000 in savings may make you ineligible.

 

[SMC2UCLA2_]

Thanks everyone. You have all been very helpfull.