The technicals of financing medical school

[hemoglobincell]

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Right now I'm kind of doing a quasi-budget to see how I would technically be able to borrow while in medical school.

My tentative yearly budget looks like this:

Rent - $22,800
Tuition/fees - $44,240
Books - $1,800
Food - $3,000
Electric - $2,400

Total - $74,240

So, ultimately, I'll need to borrow $75,000 per year...

From what I understand, the loan breakdown would look something like this:
Stafford loan (unsub + sub) = $32,500/year
Grad plus loan = $11,740
Private loans = $30,760

One thing I am confused about is the GradPlus loan. If tuition and fees is $44,240 and I get a $32,500 stafford loan, then the GradPlus loan makes up for the shortfall only (the $11,740 of tuition/fees that the stafford doesn't cover). However, does the GradPlus loan count any amount of living expenses? I would prefer not to borrow on high-interest private loans, but the median rent is $1900 and unless I get a scholarship, I'll be paying the full tuition and fees. That means a minimum of $67k without food, electricity, or books (and my budget certainly doesn't include everything).

So, does the GradPlus loan cover more than just the $11k I have on my budget, or does what I have seem about right? Also, what would my overall debt be upon graduation and how much would I have to pay per month if I paid it back over 10 years?

 

[TMP-SMX]

You need your cost of attendance increased. Are you out of state or is this just a private school? If 1900 a month is the median rent then you really need it increased. I would assume other students at this school have had the same problem unless they all had free rent. Your Stafford loans actually total $40,500 now. Most private loans today must be within the cost of attendance. Talk to your financial aid office.

 

[yadayadadude]

Here's what I think you're not understanding: schools create a budget based on total "cost of attendance" for a single student. This budget includes the school's estimate of living expenses (again, for a single student). GradPlus loans are available to cover the entire COA (tuition, fees, expenses like books and equipment, rent, food, transportation, etc.) in excess of the $40500 available in Stafford loans. Most single students with typical living expenses don't need any private loans. In your example, assuming you're right about the median rent (you must be in Manhattan or SF, yes?), the COA would be $75-80K/year. So you'd get $40500 in Stafford loans and ~$40K in GradPlus.

Your overall indebtedness is a scary, scary prospect. You need to create a spreadsheet that's based on your own numbers, but in rough terms, if you borrow $75K as an MS1 and continue similarly throughout medical school, you'll owe something like $350K at graduation (assuming that you get a cost of living adjustment of 5% each year and assuming that the cost of tuition continues to rise faster than inflation; remember that unsubsidized Staffords and GradPlus loans accrue interest in school). You most likely can't make payments on this that will be any more than spitting in the wind as a resident, so the whole mess will increase by about $20K-$25K/year during residency. It will be easy for you to owe $450K or more when your debt is capitalized when you finish residency. There are some useful calculators at www.finaid.com, but 10 year payments on $450K at 7.5% interest (a rough average of 6.8 and 8.5) are more than $5300/month.

 

[alwaysaangel]

Call your finaid office - they will give you enough for your budget and most schools offer more than enough for a single student to live comfortably. If you're married or have a family you can increase your CoA.

I think the biggest issue with your numbers is your rent. Even if the median rent in the area is 1900 you will not be expected to spend that. You will probably be expected to get a roommate and be spending about half that to share a 2bdrm. Again this would change if you were married or had children. But overall they will give you your overall budget and you should create YOUR budget from what they offer you.