Value of $ during year off

[banana5]

I'm a senior and plan to apply to medical school right after I graduate, so I'm basically taking a year off. The whole "go have fun and travel" thing is off the table - I need to work to support myself. However, I could either live at home or try to get by living with some friends in a city.

My question has to do with how much "value" I'll get out of any possible money that I'd save by living at home. Besides that money, I otherwise have no assets. Say I save up 15k over the year. When I go to apply for grants/loans, how much will this be factored into how much grant money they'd be willing to give me? Here are the possible scenarios that I can imagine (including extremes):

1) They don't care about the 15k. Whatever grant money I'd have gotten without 15k they'll give me anyway, so the 15k cuts into loans. By the time I pay all of my loans back this 15k will be 20k (25? 30? I have no idea - what do you think?), making the 15k very "valuable."

2) On the other extreme is the opposite. They see the 15k and give me 15k less grant money. I doubt this is what would happen, since it would give people a disincentive to work before going to med. school.

3) The most likely alternative (I'm guessing) is somewhere in between. They'd see the 15k and give me a bit less grant money. The question becomes how much less. If I get 14k less grant money it seems obvious that I might as well enjoy myself and spend the money as I make it, or live with my friends. If I get 1k less grant money, it'd make a lot of sense to save it. Anyone have an idea of (ballpark) what to expect?

By the way, in case it's not obvious, when I say grant money I'm referring to need-based aid.

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[chillpillman]

I would use an EFC estimator to figure out how much this cash on hand would affect your loan capability (COA-EFC). Most likely the cash on hand won't hurt you too much when it comes to Stafford loans.

If you are going for grants this is a whole new ball game. But remember if you are going to a state school you can almost forget about grants; only if you are going private can you expect the possibility for grant money. And as for predicting grant money, I think it is near impossible. Too many factors come into play: how different schools read your EFC (most will factor in your parents' income even if the government does not), how the school is doing financially, and if you fill a 'minority gap' for the school (controversial but I think true).

I applaud you for looking into this though, because you are wrong in assuming the system will not lead to "disincentive to work" - shockingly it often does.

Check out my clarification on how the numbers break down in my thread: Losing Subsidized Stafford Eligibility

Unasked for advice: The reason I would caution you about taking a year off is come interview time they will expect you to explain what you did during that year that will make you a better doctor.

Good luck!

 

[TMP-SMX]

I would use an EFC estimator to figure out how much this cash on hand would affect your loan capability (COA-EFC). Most likely the cash on hand won't hurt you too much when it comes to Stafford loans.

If you are going for grants this is a whole new ball game. But remember if you are going to a state school you can almost forget about grants; only if you are going private can you expect the possibility for grant money. And as for predicting grant money, I think it is near impossible. Too many factors come into play: how different schools read your EFC (most will factor in your parents' income even if the government does not), how the school is doing financially, and if you fill a 'minority gap' for the school (controversial but I think true).

I applaud you for looking into this though, because you are wrong in assuming the system will not lead to "disincentive to work" - shockingly it often does.

Check out my clarification on how the numbers break down in my thread: Losing Subsidized Stafford Eligibility

Unasked for advice: The reason I would caution you about taking a year off is come interview time they will expect you to explain what you did during that year that will make you a better doctor.

Good luck!

How do you figure? State schools do give out scholarships and Perkins loans. I would know since I didn't get the need-based aid last year but did this year. Though, like most people, I did get the full amount of subsidized Staffords last year. Not only that, but public schools are going to be cheaper than private schools (assuming equal living expenses).

OP, as for increasing your chances for need-based aid it will probably depend on your parental income, liquid assets, and your liquid assets. If it isn't liquid, it won't count against you. Though a certain portion of your income does count for more. As said previously try online calculators and figure it out. I'd aim for under 18k personal and parental EFC combined as that is Wayne's cutoff for need-based aid. I don't know about other schools though.

 

[chillpillman]

How do you figure? State schools do give out scholarships and Perkins loans. I would know since I didn't get the need-based aid last year but did this year. Though, like most people, I did get the full amount of subsidized Staffords last year. Not only that, but public schools are going to be cheaper than private schools (assuming equal living expenses).

Oops, forgot about Perkins eligibility. Any idea of how these loans are really decided?

As for scholarships, I thought they were all merit-based. Need-based grants seem to be a rarity at state institutions. Correct me if I'm wrong!

 

[dragonfly99]

Medical school is not like undergrad.
A lot of medical schools do not give much in the way of scholarships or grants.
To be safe, I would assume that you will pay most of your costs either out of pocket or with loans. You may get lucky and get a scholarship or grants, but don't bank on that.

The most important thing to do is not to get into credit card or other consumer debt. Try to avoid getting a new car for which you'll have car payments, etc. unless you absolutely have to.

Not sure it's worth torturing yourself by trying to save up a lot of money prior to medical school. I tried that but the thing is, even saving 8-10,000 won't help that much the way the tuition in med school is inflating each year. Not that it would hurt, but without major outside $ infusion from parents or a large scholarship you're going to be in huge debt.

Consider a cheaper med school if you get into multiple ones, unless you have a compelling reason to want to go to the expensive school(s).

Agree w/above comment. You seem to be putting the cart before the horse in assuming you'll be able to get into medical school. You may need to keep doing a medically related job to maximize your chances of getting in.

 

[banana5]

Medical school is not like undergrad.
A lot of medical schools do not give much in the way of scholarships or grants.

Do you mean state schools or private schools as well? If you're referring to all schools, I'd be interested to hear what you think of the questions I raised in the other thread I started, "How to make sense of this student budget (sample)."

Thanks for all the replies. As for the cart before the horse, of course I recognize that I need to worry about getting into med. school first. However, if I waited to start thinking about the finances of a year off until I already knew where I could be going, by definition it would sort of be too late.

 

[TMP-SMX]

Expect to pay school with loans no matter what school you go to. Scholarships are usually need-based, but some schools will try to give nice packages to lure applicants. (Very rare). At least at Wayne, Perkins and grants have the same eligibility criteria and I think if you get one you get the other. 18k or less parental and personal EFC. It is on their FA website. I'm sure other schools have the same information floating around. The schools themselves decide who to give the Perkins loans to. I'm sure it isn't too many students per year.

 

[banana5]

Expect to pay school with loans no matter what school you go to. Scholarships are usually need-based, but some schools will try to give nice packages to lure applicants. (Very rare). At least at Wayne, Perkins and grants have the same eligibility criteria and I think if you get one you get the other. 18k or less parental and personal EFC. It is on their FA website. I'm sure other schools have the same information floating around. The schools themselves decide who to give the Perkins loans to. I'm sure it isn't too many students per year.

How would I go about ballparking the personal + parental EFC? http://www.finaid.org/calculators/finaidestimate.phtml says to only include parents' information if you're a dependent, but that grad students are independent.

I've heard of FAFSA not asking for parents' information while schools asking (for the purpose of grants, presumably). Would claiming myself as a dependent and including parents' information on the above site be a good approximation for what schools might determine the combined EFC to be? And thus a good approximation of whether I'd be eligible for grants?

 

[TMP-SMX]

Yep. In the calculator call yourself a dependent. In the FAFSA itself, professional students are considered independent but if you want need-based aid you must include parental information in it. As for whether or not it is a good approximation it depends on your individual school's eligibility criteria.

 

[nogolfinsnow]

If you can save 15k, I think you can do a couple things with it:
-start an IRA
-put the rest away for a rainy day, because sh** does happen and med school grants/loans/whatever are designed to cover the COA, which is pretty bare-bones and doesn't include the unforeseen things like car repairs, dental work, etc