What to do about finances?..........

[dentwannabe]

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Ok, I'm middle class. Probably a little lower than average. Somebody was saying something about how dental schools are concerned about your financial situation in undergrad. Why would that be? Would they reject me (I've always worked w/ school) if they think that I'm not "rich" enough to afford d-school.

I mean, I always thought the whole d-school tuition would go on a loan and i'd pay it off later. So why would they care about my finances now?

 

[eric275]

Ok, I'm middle class. Probably a little lower than average. Somebody was saying something about how dental schools are concerned about your financial situation in undergrad. Why would that be? Would they reject me (I've always worked w/ school) if they think that I'm not "rich" enough to afford d-school.

I mean, I always thought the whole d-school tuition would go on a loan and i'd pay it off later. So why would they care about my finances now?

Not with any of the schools that I have applied to or heard of. I'd say about 95% or more of my class in paying for school through loans. One thing that can have a negative impact on your dental school future is if you have terrrible credit. If you have ruined your credit and have no one to co-sign on a loan for you, you can have trouble getting private loans which could lead to your not being able to pay for school.

Typically speaking you should be fine, the majority of people on this web-site will be finishing d-school with substantial amounts of debt.

 

[aphistis]

Personally, I'd be hoping to find out a school *did* reject you because of your bank balance. After you nailed them to the wall for discrimination, you could write a check up-front for the whole four years wherever you ended up.

In reality, though, it's not a concern. There's more than enough student loan money out there for everyone who gets admitted.

 

[Sprgrover]

Ok, I'm middle class. Probably a little lower than average. Somebody was saying something about how dental schools are concerned about your financial situation in undergrad. Why would that be? Would they reject me (I've always worked w/ school) if they think that I'm not "rich" enough to afford d-school.

I mean, I always thought the whole d-school tuition would go on a loan and i'd pay it off later. So why would they care about my finances now?

You are not going to be rolling in dough during dental school. The vast majority of students don't hold down jobs while in school, and if they do, it is usually something small and on the side. If you have a lot of out standing loans which would require you to make payments during dental school this would impact your financial situation. Schools, by law, can only give you so much to live on and they want to be more or less financially sound so that you can get by on what little they give you. Also, both documentation of personal and parental resources are required to determined need based aid (e.g. Health Profession Loans ). Don't worry, a school will not reject you based on your finances and as others have noted the lion's share of students (myself included) are taking out loans to cover the expense of dental school.

 

[drengineer]

I agree with the MODS over here. I mean... that's the smart thing to do.
No seriously, they are right.

 

[La Miraflorina]

But do schools expect you to make even a small contribution? My pathetically small savings went towards the high costs of applying, interviewing, etc... I'm planning on getting loans for literally EVERYTHING. That doesn't matter, right?

 

[drengineer]

But do schools expect you to make even a small contribution? My pathetically small savings went towards the high costs of applying, interviewing, etc... I'm planning on getting loans for literally EVERYTHING. That doesn't matter, right?

I'm in the same situation. Whatever i had left of my savings they will be gone by the time I get back from my next interview trip.

 

[eric275]

But do schools expect you to make even a small contribution? My pathetically small savings went towards the high costs of applying, interviewing, etc... I'm planning on getting loans for literally EVERYTHING. That doesn't matter, right?

While you can walk into d-school with $0, one thing that you should be aware of that caught some of my classmates off guard is that once you start school it can take 1-2 months before you actually start recieving your financial aid money. Granted this will vary depnding on when your classes start and what school you attend but definately something you should check into once accepted. For example we started classes Aug. 1st and some students recieved thier money the beginnning of Sept. while others recieved thier money at the end of September. So you might want to get a credit card or get a loan from a relative or freind to cover your expenses until you recieve your FA.

 

[FutureMrs.DDS]

What about being married? Do they still care about what your parents make? I mean I've been on my own for 4 years and will be married for a year when school starts next August. Does it matter how much your spouse makes? Will they still give you the same amount of money? What if you start a family during that time, or the people going into school that already have families. I'm curious.

 

[Audio]

What about being married? Do they still care about what your parents make? I mean I've been on my own for 4 years and will be married for a year when school starts next August. Does it matter how much your spouse makes? Will they still give you the same amount of money? What if you start a family during that time, or the people going into school that already have families. I'm curious.

I say pop out a kid so you can get more money 👍

 

[Sprgrover]

But do schools expect you to make even a small contribution? My pathetically small savings went towards the high costs of applying, interviewing, etc... I'm planning on getting loans for literally EVERYTHING. That doesn't matter, right?

Oh, you'll still get loans to cover your dental school budget - no problem. The amount you have saved up and your parents income will be used to determine what kinds of financial aid you qualify for - you'll get the government loans no problem. There is a cap to how much you can borrow from the government. If you attend a univeristy, such as Penn, whose budget exceeds this limit (the government's limit is ~ $38,500) you will have to turn to other sources to make up the difference, such as grant, health profession loans, and private funding. Your financial information (including your parents, if you are not married) are used to determine what kinds of secondary funding you are eligible for.

 

[Sprgrover]

... can get more money 👍

Won't happen. Dental school's budgets are formulated around the living expenses of a single male and use outdated figures from the mid-1980's and follow federal guidelines. It doesn't matter if you are married, married with four kids, or divorced with ten - your budget will not be increased to cover any of these additional expenses. Expensive car payments or a mortgage? Once again, financial aid offices will not increase your budget (thereby allowing you to borrow more). This is why dental schools ask you to have your finances under control. Unless you have access to additional resources (trust funds, rich relatives, etc.) the amount of money allocated to living expenses (Rent, food, bills, gas, payments on this and that) is rather meager (~$1,300 per month). You have congress to thank for this. If you are not happy with this amount I urge you to contact your representative about this matter as Congress is currently looking into changing some numbers concerning health professional student's budgets.

 

[OffAngleHatchet]

But do schools expect you to make even a small contribution? My pathetically small savings went towards the high costs of applying, interviewing, etc... I'm planning on getting loans for literally EVERYTHING. That doesn't matter, right?

Most people do get loans for everything. I was basically in your shoes too, using up my savings to do everything needed for dschool. My expected yearly contribution came out to be $3k/year.

But in the end I went for the military scholarship program, so I'm getting most of my expenses paid for.

 

[SuperC]

Any good CFA will tell you that you should loan it if interest rates stay the way they are.

Consider this....
Suppose you are NOVA bound
Four years = $147,940
Books/equip = $19,700
Est living exp = $52,000
Total = $219,640
----------------------------------------------------------------------
The Stafford Loan interest rate for the 2003-2004 academic year is 2.82%
So...

Consider your debt after 10 years without paying a dime on it.

Case A (loans)
After ten years, no payment your debt (ba-pa-da-ba!!!)
About $290,000

Case B (cash)
Now, say because you are loaded and completely stupid, you pay cash money. After 10 years = None

Case C (invest)
You’re loaded and instead of paying you are smart and you loan it. Meanwhile you place the $219,640 in the market. A good CFP should be able to get you about 8% a year.
So, your worth after 10 years about $480,000 - your loan (that you finally decided to pay on [you lazy SOB] about $185,000

So the long and short of my math extravaganza! You would have to be HIGH on crack to pay cash for school. You can make almost 200k if you loan/invest.

Good Luck,
-C

 

[organichemistry]

Won't happen. Dental school's budgets are formulated around the living expenses of a single male and use outdated figures from the mid-1980's and follow federal guidelines. It doesn't matter if you are married, married with four kids, or divorced with ten - your budget will not be increased to cover any of these additional expenses. Expensive car payments or a mortgage? Once again, financial aid offices will not increase your budget (thereby allowing you to borrow more). This is why dental schools ask you to have your finances under control. Unless you have access to additional resources (trust funds, rich relatives, etc.) the amount of money allocated to living expenses (Rent, food, bills, gas, payments on this and that) is rather meager (~$1,300 per month). You have congress to thank for this. If you are not happy with this amount I urge you to contact your representative about this matter as Congress is currently looking into changing some numbers concerning health professional student's budgets.

Let me ask a question about this ~$1300 a month. I've got about $25,000 saved from jobs which is enough to throw down a down payment for a condo to live in. The mortgage would be about $500, which probably isn't far from what I would pay in rent. But to actually buy a home, I doubt I'll be able to use the fact that I've got $1300/month ($2600/month, really, since my wife will be a med student) to pay the mortgage off.

Any chance of being able to buy a home, even though the money that will pay the mortgage for the first 4 years will be student loan money? If not, how is it really any different than signing a lease at an apartment where your credit is checked and they ask you for your montly income (which is supposed to be, what, 4x the rent in question)?

...Or will I have to convince Dad who has the credit and money to do me a favor in terms of getting approved. Essentially, I could easily afford the house (down payment, make monthly payments using loan money), but I'm not so sure people buy homes like this.

 

[Sprgrover]

Let me ask a question about this ~$1300 a month. I've got about $25,000 saved from jobs which is enough to throw down a down payment for a condo to live in. The mortgage would be about $500, which probably isn't far from what I would pay in rent. But to actually buy a home, I doubt I'll be able to use the fact that I've got $1300/month ($2600/month, really, since my wife will be a med student) to pay the mortgage off.

Any chance of being able to buy a home, even though the money that will pay the mortgage for the first 4 years will be student loan money? If not, how is it really any different than signing a lease at an apartment where your credit is checked and they ask you for your montly income (which is supposed to be, what, 4x the rent in question)?

...Or will I have to convince Dad who has the credit and money to do me a favor in terms of getting approved. Essentially, I could easily afford the house (down payment, make monthly payments using loan money), but I'm not so sure people buy homes like this.

There are a few classmates of mine, and I know there are others at various dental schools, that have purchased places and all of the ones I am aware of here at Penn required a cosigner, usually a parent. Traditionally loans are not considered a reliable source of income - what happens if you withdraw from dental school? - and banks tend to look down on this. Banks want to make sure that they have the best guarantee possible that timely payments will be made to them (defaulted mortgages and property on bank's books is very damaging to a bank and something they try to avoid) and the best place to regulate this is the mortgage process. Besides credit scores another major area of concern is the nature and source of your income. I'm not saying that you will not qualify for a mortgage, rather you should be prepared to have a cosigner should banks shy away from your application based on your financial situation, which will be itself financed.

 

[SuperC]

Everyone knows how the housing markets are these days, and there are predictions that say that the market will cash soon or it will continue for years to come.

I plan on buying a home with a cosigner, why?
If you are planning to hold on to the home/condo for more than 2 years you are better off buying. Paying rent is essentially paying someone else's mortgage. Why not pay your own?

Even if the market crashes and you had to hold on to the home, dental school will continue. Thus, you can rent the home and continue to build equity in the property until the market provides an out.

Whenever possible, buy a home. Some analysis (Fox News) has said, if you haven’t bought a home yet, it is time. Interest rates are still low and you can still get in while the getting is good.

Example
I know several people that have made 100K to 200k on homes in under 4 years with the current trends in the market. If the home market can stay alive we can all stand to make some cash on the side by buying.

I say buy...

 

[TeethVader]

Don't worry buddy, look: I'm not even middle class, I'm poor, I mean poor; I never lived in the suburbs, always in the getto; I don't have the dentist daddy or any kind of rich parents; nothing! I've always work while in school. Went to commuter colleges and sometimes I've struggled. My credit was horrible, fixed it up a little and now...I'm at USC: one of the most expensive dental schools. The financial aid people worked with me and helped me out. I am very fortunate to be where I'm at right now; they never discriminated me for the fact that I was very poor and with bad credit...I mean who want's to accept a guy that is Poor and a Risk....well I'm a first year. My two cents...

 

[aphistis]

Everyone knows how the housing markets are these days, and there are predictions that say that the market will cash soon or it will continue for years to come.

I plan on buying a home with a cosigner, why?
If you are planning to hold on to the home/condo for more than 2 years you are better off buying. Paying rent is essentially paying someone else's mortgage. Why not pay your own?

Even if the market crashes and you had to hold on to the home, dental school will continue. Thus, you can rent the home and continue to build equity in the property until the market provides an out.

Whenever possible, buy a home. Some analysis (Fox News) has said, if you haven’t bought a home yet, it is time. Interest rates are still low and you can still get in while the getting is good.

Example
I know several people that have made 100K to 200k on homes in under 4 years with the current trends in the market. If the home market can stay alive we can all stand to make some cash on the side by buying.

I say buy...

That's a lot of "if", anecdote, & opinion to be basing such an important decision on.

 

[SuperC]

That's a lot of "if", anecdote, & opinion to be basing such an important decision on.

You are right. So don't believe me and figure out your expenses and put them in this handy-dandy cost comparison applet.

http://www.fincalc.com/hom_06.asp?id=6

Everyone's situation is different, so this will give an idea of what might be best for you.

P.S a rule of thumb for apprecation is about 6%

-C

 

[aphistis]

You are right. So don't believe me and figure out your expenses and put them in this handy-dandy cost comparison applet.

http://www.fincalc.com/hom_06.asp?id=6

Everyone's situation is different, so this will give an idea of what might be best for you.

P.S a rule of thumb for apprecation is about 6%

-C

I'm getting a 404 on the link, alas.

It was a while before you registered, but I made several posts a ways back about handling student loan debt after we graduate. I agree with you 100%; I was just trying to nudge you into linking some references. 😉

 

[ItsGavinC]

P.S a rule of thumb for apprecation is about 6%

-C

Unless you're in the Phoenix area, where a conservative estimate is 30-35% yearly.

 

[Ruprick]

Unless you're in the Phoenix area, where a conservative estimate is 30-35% yearly.

I think the 30% appreciation gains are gone for a little while! 🙂

Who knows, though. My guess is we are closer to 10-15% now, still great.

 

[johnstylzes]

I think buying a house in SF (specifically Pacific Heights) is a bit out of the question for me 😉

 

[IcemanDDS]

So how would it work, if say... you have $X left on a car loan when you enter dental school. Would a school loan incorporate the remainder of your car loan since you cannot work while in school? Or would you just have to get rid of the car and get something cheaper you can pay off right away?

 

[Missserica]

Any good CFA will tell you that you should loan it if interest rates stay the way they are.

Consider this....
Suppose you are NOVA bound
Four years = $147,940
Books/equip = $19,700
Est living exp = $52,000
Total = $219,640
----------------------------------------------------------------------
The Stafford Loan interest rate for the 2003-2004 academic year is 2.82%
So...

Consider your debt after 10 years without paying a dime on it.

Case A (loans)
After ten years, no payment your debt (ba-pa-da-ba!!!)
About $290,000

Case B (cash)
Now, say because you are loaded and completely stupid, you pay cash money. After 10 years = None

Case C (invest)
You’re loaded and instead of paying you are smart and you loan it. Meanwhile you place the $219,640 in the market. A good CFP should be able to get you about 8% a year.
So, your worth after 10 years about $480,000 - your loan (that you finally decided to pay on [you lazy SOB] about $185,000

So the long and short of my math extravaganza! You would have to be HIGH on crack to pay cash for school. You can make almost 200k if you loan/invest.

Good Luck,
-C

Are you basically saying that even if we do have the money to pay for dental school that we should take out loans and invest the money somewhere? if so, where?

 

[SuperC]

If you do have the money, it is most likely not sitting in a savings account. If it is your money is doing NOTHING for you.

I am, by no means, a professional that being said, I would talk with some people you know and ask them who they use for financial planning, then set up a meeting with him/her.

I personally don't think you should play around with your own money.... Greed, stupidity, and stress get in the way.

I know a great CFP in Ponte Vedra Beach, FL (Jacksonville) if you are interested, I will give you his contact info if you would like.... PM me.
-C