Taking out maximum loans?

[alpinebrook]

I'm heading into my second year and I've decided to take out the maximum loan $$ again... If I do this all four years, I'll graduate with almost $270,000 in debt, and that's not even considering interest.

It's not that I'm some spoiled brat... the money just adds up! I love the school I attend, but it is the only school I was accepted to, and it's expensive and I'm OOS (there's about $55,000 per year right there).

I need to have a reliable car (my school is out in the middle of nowhere with no public transportation), and I want to make sure I have enough money for good food, study materials, etc.

What do y'all think? Anyone else in this situation? I just feel so lame for taking out all possible loans but after doing my budget, it seems like it's just what I have to do... YOLO and I'm not willing to live off of "tuna fish and BBQ sauce" like somebody else I know...

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[KGflyboy]

You can live cheaply of you want. What is your definition of a reliable car? If you are making payments and/or driving a nice car, that is one place you can cut back. You can find a reliable care with under 100k miles for a few thousand if you shop around. Also, are your living conditions representative of a college student living off loans? Are you living somewhere with low rent and splitting costs with a roommate? Are you eating out or making your own food at home? There are many ways to save money if you are interested.

That being said, I don't know how much you are borrowing, so I have no way of knowing how efficient you are being with your money. It's possible in some situations to need to borrow the max amount just to make ends meet.

 

[survivordo]

I'm always a proponent of cutting expenses. It is true that every bit counts and that with interest these add up. However when it comes to the astronomical amount of your tuition there is very little you are going to be able to do to offset that.

Survivor DO

 

[alpinebrook]

I knew I should have specified what I mean by a "reliable car" 🙂 I bought a new 2012 Corolla before starting med school. I got a really good deal on it and the interest rate is only 0.9%, so it was a no-brainer. I plan to have it for a long time. And yes I mostly cook at home, and I do have a roommate; rent is about $580 per month and that's for a really nice apartment (the cost of living is so much cheaper where my school is versus where I'm from...) Maybe I have gotten spoiled... I'm just not willing to live in a craphole where I could spend a little more and have a really nice place to live.

 

[Suncrusher]

my CoA at my OOS school is $84k/year. I've found I can shave at least $7k/year off that by not buying textbooks and living frugally (rarely eat out or shop for clothes, etc.). I didn't take out the max amount of loans this year, because I have enough saved from last year. My rent is more than yours, so I'm not sure where there is so much difference in our costs of living. Anyways, that ~$320k debt is always in the back of my mind, and I have a hard time not laughing in the faces of school administrators who ask me if I'm interested in primary care.

 

[Rub A Dub GTI]

Anyways, that ~$320k debt is always in the back of my mind, and I have a hard time not laughing in the faces of school administrators who ask me if I'm interested in primary care.

LOL

 

[KGflyboy]

I knew I should have specified what I mean by a "reliable car" 🙂 I bought a new 2012 Corolla before starting med school. I got a really good deal on it and the interest rate is only 0.9%, so it was a no-brainer. I plan to have it for a long time. And yes I mostly cook at home, and I do have a roommate; rent is about $580 per month and that's for a really nice apartment (the cost of living is so much cheaper where my school is versus where I'm from...) Maybe I have gotten spoiled... I'm just not willing to live in a craphole where I could spend a little more and have a really nice place to live.

It sounds like you are living fairly reasonably. You have fairly cheap rent. It's just odd to hear you say you are worried about loans though right after buying a brand new car and living in a really nice apt. There is a gray area between living in a crap hole and having an unreliable car and your standard of living. There is nothing wrong with living that way... Just know you are spending more than most unemployed college students and might need to borrow more money as a result. Most people wait until they are working full time to buy new cars... Heck... Even the orthopod I met last week said he buys all of his cars used, and he is a partner in a private practice.

 

[calvnandhobbs68]

I knew I should have specified what I mean by a "reliable car" 🙂 I bought a new 2012 Corolla before starting med school. I got a really good deal on it and the interest rate is only 0.9%, so it was a no-brainer. I plan to have it for a long time. And yes I mostly cook at home, and I do have a roommate; rent is about $580 per month and that's for a really nice apartment (the cost of living is so much cheaper where my school is versus where I'm from...) Maybe I have gotten spoiled... I'm just not willing to live in a craphole where I could spend a little more and have a really nice place to live.

You mean the interest rate is 7.7% since you're paying that car off with loans.

Edit: Obviously I'm adding the .9% car loan to the 6.8% Stafford being used to pay the car off so the effective rate is 7.7%.

 

[KGflyboy]

You mean the interest rate is 7.7% since you're paying that car off with loans.

I never thought about that. I wonder how much a $20k car will end up costing after 15-20 years of compounding interest at 7.7%. That's scary.

 

[Trogghunter]

Take out max loans...live comfortably but get used to living on 30k/yr. Loan payments during residency will be based in your income and come to 450/month. If you're in your mid/early 20s then its not a thang and is 28k that big of a difference in the grand scheme of things if it keeps you happy/comfortable? Youre going to graduate with a lot of debt and enough interest to buy a maserati. Swallow that pill. Done? Well youre going to be a doctor, so thats reassuring.
Remember...you own your possession they don't own you and the guys in medicine chasing $$$ are not that happy and will be even more disappointed in the future. Do not dwell on it, and do the best that you can do to learn and be happy. My folks are docs, didn't pay my way- even through undergrad. I'm in your boat, and a lot of people are too. Hell, if student debt gets bad enough, it'll collapse like the housing bubble, and we will still have our wealth of knowledge and utility as physicians.
Pay back what you can because its tax deductible, but keep in mind that a loan at 7% now and even compounding is a lot cheaper than what you pay on a credit card balance.