What options after reaching financial aid limit?

[hokte]

I'm about to start med school in Aug. and I have basically already reached my lifetime limit of federal financial aid. What other options are out there for me to explore other than grants and scholarships????

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[Vincristine]

unless you've already been in graduate school and assumed $138k in debt, how is this possible?

 

[mpp]

The cumulative lifetime limit of federal Stafford loans for medical students is $189,125. If you have somehow reached this limit already, there are always some private loans.

 

[hokte]

Yes, I have been in graduate school, that's how I got this huge debt. I guess I may have to go the private loan route....

 

[Vincristine]

have you taken the opportunity to calculate a repayment plan? I'm not saying not to go to medical school, but emerging $250-300k in debt might be more than it's worth. I also have a feeling that private lenders might be a bit hesitant to extend further credit with such a high debt load already, even if it IS educational debt.

 

[hokte]

Yes, I've calculated a repayment plan and while it certainly a massive amount of money, it's definately not more trouble than it's worth. I think the medloans ALP program has a maximum of $220,000. So I assume there are many people that get out with whopper debts Also, I have a plan for repayment. I live in a rural area, and there are also many Indian tribal hospitals that have repayment programs. Unfortunately since I don't have my CDIB card I cant take advantage of these programs to send me to school.

I'd rather pay $2000.00 a month in student loan payments to work in a profession I love, than to pay $500.00 for something I dislike. But that's just me....

 

[chameleonknight]

Join the army! Or do some other service scholarship. It sounds like you may be limited at this point.

 

[vlbe]

how does one go about completing 5 classes when they have maxed out in Fin Aid?

 

[TMP-SMX]

You could theoretically take out your full cost of attendance in gradplus loans but christ almighty please do something to reduce your debt like a primary care/loan forgiveness program. It actually isn't that big of a deal as the rate is 8.5% vs. 6.8 for stafford. However, since you are already high in debt I hope you marry rich or are going to very inexpensive med school.

 

[dragonfly99]

hokte,
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.

 

[Retrospective]

... all the cadavers in the house throw your hands up!!

 

[TMP-SMX]

how does one go about completing 5 classes when they have maxed out in Fin Aid?

Is this for undergrad? What do you mean maxed out financial aid? Per year staffords or for all of undergrad? If it is just in staffords then there are plus loans available or private loans.

... all the cadavers in the house throw your hands up!!

I usually do so well and read dates on threads.

 

[Bleurberry]

hokte,
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. Since privates schools average about 35-45k a year in tuition alone, how do you figure? Tag another 20k for all the living expenses, and you're well above 150k. Assuming a public school only charges 15-20k, you're still looking at over 150k. Boys and girls with wealthy parents, that's another matter, but those of us going it alone are looking at 150k-250k. And I, for one, still have 30k due from undergrad.
Howstuffworks.com says those going to private medical schools, a 1/3 of them graduate with debt more than 100k. http://people.howstuffworks.com/becoming-a-doctor11.htm

When you factor in consolidation, this isn't the end of the world. I'd prefer not to have this prospectus, but there you have it.
And I agree with the OP, I wouldn't consider another profession just because of education loans. Education loans are cumbersome, but it's a doorway to financial freedom. It's basically a mortgage payment when you get out. During intern and residency years, without a spouse ( who doesn't have to be a millionaire) it's probably demoralizing as hell, but depending on your focus and savvy, after becomming an attending and living within one's means, it's hardly a comparible struggle with 90% of the work force in this country. My 0.02.

 

[Lesley]

"I know you're knowledgable, but are you seriously saying most students don't graduate with over 100k debt?
That seems bizarre to me."

Me too.

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.

http://dentistry.usc.edu/doctoral.aspx?id=912&linkidentifier=id&itemid=912&menu_id=258

Education is an expensive decision, but it should be more of an asset going forward than a debt.

 

[akpete]

I know you're knowledgable, but are you seriously saying most students don't graduate with over 100k debt?

This was in reference to ENTERING med school with over 100k debt.

 

[Bleurberry]

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!

 

[yadayadadude]

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.

 

[Bleurberry]

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.

 

[TMP-SMX]

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."

 

[Bleurberry]

Thanks, TMP!

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."

 

[dragonfly99]

Yeah, it's a good deduction but it should be bigger. I have paid >$2500k interest every year of my residency/fellowship but the intern year, and I have only been able to claim $2500. It sucks since you only get to deduct the interest, not the principal, too.