how does one go about completing 5 classes when they have maxed out in Fin Aid?
... all the cadavers in the house throw your hands up!!
I'm really concerned about your level of debt. Are you saying you have already maxed out the lifetime maximum for Stafford loans, or that you will at some point in medical school?
I suggest that you talk with your med school's financial aid office very soon...like this spring, way before you start medical school. Your situation is different than a lot of entering students. It's not uncommon to have some debt, but I'll wager it is uncommon to already have >100k in debt.
You may want to consider the NHSC (only if very strongly interested in primary care) and/or the military. Normally I tell people not to do this since a lot of times medical students' interests and life circumstances change while they are in school, but I would worry about you repaying 250 or 300k in debt at 6.8% interest.
"I know you're knowledgable, but are you seriously saying most students don't graduate with over 100k debt?
That seems bizarre to me."
I think a lot of professional students are graduating with well over $200,000/$300,000 and even $400,000 including interest on unsubsidized debt during professional school for just their first professional degree, maybe not even including undergrad debt, especially those that do not have significant family help.
At USC dental school, 2008-2009, the first years inclusive costs are $102,000. For all four years, provided a student graduates on time, often this is not the case, including interest, debt for the first professional dental degree is at least $400,000. Although USC may be at the top of the heap cost wise, many state schools for out of state students are similarly high, as are other private schools.
Education is an expensive decision, but it should be more of an asset going forward than a debt.
This was in reference to ENTERING med school with over 100k debt.
Ok, but I factored that into my estimates. Look, if I enter with $100k debt, sure, I may be closer to the 250k-300k range, but after consolidation, what are we practically dealing with? Well, probably a little over 2250k a month payments, maybe even less. That's not the end of the world if you're pulling in over 10k before taxes. And of course there's a little tax break too, but I wouldn't factor that in for the conversation's sake. This is assuming you don't defer the payments during residency, that's an admission of a caveat in my statements.
<shrug> I mean, I've had a mortgage before that approached 230k (with very little principle down), and I know what the payments were, and my rate wasn't much lower than what it'll be after I consolidate my student loans. Tell me if I'm off base, though, I'm not gunning to be right, just right on, because inquiring minds want to know!
Consolidating won't lower your rate. Rates are fixed. Expect 6.8% on Staffords and 8.5% on GradPlus.
Tax advantage (deducting student loan interest) doesn't apply to most practicing physicians; AGI ceiling is too low.
Sorry, I didn't mean to say the rate would fall. If anything, it'll increase the rate you had a bit. But loan paybacks out of school are based on a 10 year program. When one consolidates, it's turned into 20 or even 30 years. And the tax writeoff may not apply to attendings (although I have to investigate that for myself, since it is loan interest), but it does for interns and residents.
If you are married and make over $145,000 you can't take the $2500 deduction. If you are single and make over $70,000 you can't take the deduction. Starting at $110,000 and $55,000 respectively the deduction begins to be phased out. So unless you are married and the spouse makes decent change you should be able to claim the deduction every year of residency/fellowship. Starting as an attending though it's unlikely any of us will be eligible.
From: Pub 970
"Income limits increased. If you are married and file a joint return, the amount of your student loan interest deduction for 2008 is gradually reduced (phased out) if your modified adjusted gross income (MAGI) is between $115,000 and $145,000. You cannot take a deduction if your MAGI is $145,000 or more. This is an increase from the 2007 limits of $110,000 and $140,000. See Effect of the Amount of Your Income on the Amount of Your Deduction , later, for more information."