Taking out additional loans

[longstech]

---

Members do not see this ad.

Hello~

I am a married student finishing my first year. I am not maxing out on my loans, because my husband works and I don't need the money. I have been told by several people that I should be maxing out on my loans, and save the extra money for when I get out of residency and want to go into a practice. What do you think about this? I don't see the point in taking out money that I don't need right now.

Thanks.

 

[NatCh]

Hello~

I am a married student finishing my first year. I am not maxing out on my loans, because my husband works and I don't need the money. I have been told by several people that I should be maxing out on my loans, and save the extra money for when I get out of residency and want to go into a practice. What do you think about this? I don't see the point in taking out money that I don't need right now.

Thanks.

I think that sounds like a good way to rack up a lot of unnecessary debt early.

 

[Feli]

It's up to you, but in your situation, I would take out the max Stafford subsidized loan amount that you are approved for (probably $20k/yr depending on your household income) since that has its interest paid by the govt until graduation. A few students in my class had family that paid for their tuition, but they still took out the subsidized loan amounts they were approved for. There is no reason I can think of not to take interest free loans, even if you are just going to put that money in the bank for unforseen educational expenses (car problems, job loss, 4th year travel expenses, interview travel, relocating to your residency city, etc).

The unsubsidized Stafford loans and other interest bearing loans are clearly another story though. You obviously only borrow what you need to avoid paying interest.

 

[NatCh]

It's up to you, but in your situation, I would take out the max Stafford subsidized loan amount that you are approved for (probably $20k/yr depending on your household income) since that has its interest paid by the govt until graduation. A few students in my class had family that paid for their tuition, but they still took out the subsidized loan amounts they were approved for. There is no reason I can think of not to take interest free loans, even if you are just going to put that money in the bank for unforseen educational expenses (car problems, job loss, 4th year travel expenses, interview travel, relocating to your residency city, etc).

The unsubsidized Stafford loans and other interest bearing loans are clearly another story though. You obviously only borrow what you need to avoid paying interest.

Oh yeah, I forgot about the interest-free subsidized loan program. In that case I would take the money and try not to blow it on cars, booze, and hookers. ha ha.

 

[longstech]

Thanks for the responses. I would understand taking out extra subsidized loans, but unfortunately I do not qualify for them so I am left with only unsubsidized. So I guess I will not be maxing out, which sounds good to me.

 

[podpal]

If u have a husband willing to pay your educational costs, honey let him! Remember the song, "when a man loves a woman"..he will do anything...? If he decides to dump u later on, as happens frequently in pod school and beyond, at least you'll have lower loans. If you do take out extra loans, keep them in a secure bank account that he doesn't know about...just in case. Always have a backup plan and don't trust men!

 

[air bud]

i might as well post here since the topic is being discussed...I know very little about student loans since I have been fortunate in the past. If you qualify for subsidized, and you were applying for lets say 15k, do you need to fill something out to say you want the first 8500 of it subsidized, or is it automatic?

 

[215512]

i might as well post here since the topic is being discussed...I know very little about student loans since I have been fortunate in the past. If you qualify for subsidized, and you were applying for lets say 15k, do you need to fill something out to say you want the first 8500 of it subsidized, or is it automatic?

come on man, just call your schools fin aid office, theyll walk you through it

 

[msuDPM]

i might as well post here since the topic is being discussed...I know very little about student loans since I have been fortunate in the past. If you qualify for subsidized, and you were applying for lets say 15k, do you need to fill something out to say you want the first 8500 of it subsidized, or is it automatic?

Not quite.

You fill out your FAFSA and whatever else your school requires with YOUR financial information.(i think your spouse's too if you have one, but not your parents.) Based on your financial status, you receive an 'award summary.' The summary will be itemized for every form of government aid you qualify for. The majority, if not all, of the aid you are offered will be in the form of the Stafford Loan. Stafford loans, as you know, are either subsidized or unsubsidized. As a med student you're eligible for up to I believe 40,500/yr now, however the portion of that you can take out as subsidized is the gov's decision based on your info. The most you can be offered subsidized is 8500/yr. After whatever the amount of subsidized you are offered, unsubsidized will make up the difference to 40,500 (you will only fail to qualify for the max of 40,500 if you are independantly wealthy or already managed to rack up 225k is stafford loans.)

Now when you get your offer sheet, next to each itemized offer there will be boxes to fill in that say something to the effect of: "decline this aid", "accept full amount", and "accept this aid but reduce to:" So basically, if you only want to take out 15k and your offered the max for subsidized and unsubed, check accept full subsidized and then accept reduced amount of 6,500 for unsubed. Mail the sheet back to your financial aid office and, providing you've covered tuition they'll send you back a sweet refund check for the difference.

Then you can use that sweet extra cash to buy groceries and cry at every meal as you calculate how much that 5 dollar frozen pizza really costs you at 6.8% APR over a period of 20 years😱

Unfortunately, Ive gotten to know financial aid pretty well over the past 4 years. So, if you have any more Q's you can PM me. But Theta makes a good point as far as the process, since every school handles these things differently your school's financial aid office is your best resource.

In the meantime and just so you know what you're getting into, I recommend tooling around this page http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp

 

[air bud]

I have looked at a lot of stuff, and it has been somewhat unclear. msuDPM's post was exactly what I wanted and needed to know. Thank you. Yes, I could have called my school. I am usually the first one to jump on pre-pods about this. We are in the pod/resident...ssshhhhhhh, don't tell the pre-pods.

Damn, I hate it when thetachi is right....crap this better not get quoted

 

[215512]

It was confusing for me too, I called Tanya from CSPM and it took a while but I got it, just fafsa, then get award packet, sign some stuff, do find aid test on edfund.org or something, choose provider, pick amount of loans to take out, then get approved and wait for your check, then call the school every now and then to confirm 🙂

Yes I was right, could be worse...

 

[G0dFather]

i might as well post here since the topic is being discussed...I know very little about student loans since I have been fortunate in the past. If you qualify for subsidized, and you were applying for lets say 15k, do you need to fill something out to say you want the first 8500 of it subsidized, or is it automatic?

o0o0o i thought u were mister know it all .... always jumping on people's ques.

 

[215512]

o0o0o i thought u were mister know it all .... always jumping on people's ques.

 

[whiskers]

The only way I would do this is if I had a good feeling that inflation was going to hit the dollar very hard and that interest rates were going to increase....and you were appropriately invested

or


You had a strong feeling that student loan consolidation in the near future would allow you to refinance at 1-3%....

or

Another thing, is if I had a very strong feeling that a particular investment was going to do well and you were willing to take the risk.

and there are other ideas,

But taking out money just to put it in the bank and have a safety net in 5 yrs at this point in time is useless in my opinion and probably will lose a lot of value by inflation.

But if you have a plan for how you will manage it, that's a little different.