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We have to make decisions about loans for 3rd year soon and I'm curious as to what you would do in our situation.
We've taken out loans both years to pay tuition. I take care of our other expenses with my income. The first year DH got a scholarship and all other loans were subsidized so the interest was paid by the gov. or other party until the end of residency. The second year there was no scholarship and fewer subsidized loans available to us, so we took what we could subsidized and took the rest unsubsidized. Keep in mind that tuition isn't too bad here--about 15k a year.
In the meantime, we've set aside $500/month towards school costs in an account in lieu of paying the tuition directly. We've taken out some to pay for boards, test prep, etc. but for the most part it is still there. I got an unexpected bonus this year and we'll have some money back on our tax return we plan to put in the account. We have an additional regular savings account, but it doesn't have near as much.
When a large portion of the loans were subsidized, it made sense to us to hold onto the money in case we needed it and then make a decision about what to do with it when DH graduated. It was announced not to long ago that all loans would now be unsubsidized, so we really need to re-evaluate our decision before we take out more financial aid for this upcoming year. It seems silly to pay accumulate interest when we have the money sitting in the account, but I'm thinking about the following possible expenses, too.
--Interview expenses for 4th year
--I have a 2000 Taurus that I absolutely love--I could get 2-4 more years out of it easily and it is generally in good shape. BUT it has a freon leak--my dad has been able to "duct tape fix it" with Stop Leak, but I've priced it out and the cost to get it fixed is $1000 if the Stop Leak stops working. This is something that has to be fixed if it breaks because it means no A/C...in Texas. The car is probably only worth $2500, but if it breaks, no one would buy a car with no A/C in Texas so I'd have to shell out the $1000 to even sell it. So I'm taking a gamble by not selling it while it's working okay. Either way, we're going to have to buy a new car before the end of residency.
--I'd like to buy a house during residency and we could probably get a decent down payment out of this in the next two years.
And mainly I just worry about the "what ifs?" What if I lose my job? Our regular savings account would get us by for awhile and we could take out loans, but I'd like to have the money there and available to me if we really really need it.
I guess I just need to do the math and see how much it will really cost us in interest to hold onto the money. The most we could really leave med school with is about $70k in loans (about $20k subsidized and $50k unsubsidized) and we have no undergrad or other debt...it seems like so much, but then again it doesn't.
What pieces am I missing here? Would you take out more loans for the full amount of tuition or try and pay back some of it now?
We've taken out loans both years to pay tuition. I take care of our other expenses with my income. The first year DH got a scholarship and all other loans were subsidized so the interest was paid by the gov. or other party until the end of residency. The second year there was no scholarship and fewer subsidized loans available to us, so we took what we could subsidized and took the rest unsubsidized. Keep in mind that tuition isn't too bad here--about 15k a year.
In the meantime, we've set aside $500/month towards school costs in an account in lieu of paying the tuition directly. We've taken out some to pay for boards, test prep, etc. but for the most part it is still there. I got an unexpected bonus this year and we'll have some money back on our tax return we plan to put in the account. We have an additional regular savings account, but it doesn't have near as much.
When a large portion of the loans were subsidized, it made sense to us to hold onto the money in case we needed it and then make a decision about what to do with it when DH graduated. It was announced not to long ago that all loans would now be unsubsidized, so we really need to re-evaluate our decision before we take out more financial aid for this upcoming year. It seems silly to pay accumulate interest when we have the money sitting in the account, but I'm thinking about the following possible expenses, too.
--Interview expenses for 4th year
--I have a 2000 Taurus that I absolutely love--I could get 2-4 more years out of it easily and it is generally in good shape. BUT it has a freon leak--my dad has been able to "duct tape fix it" with Stop Leak, but I've priced it out and the cost to get it fixed is $1000 if the Stop Leak stops working. This is something that has to be fixed if it breaks because it means no A/C...in Texas. The car is probably only worth $2500, but if it breaks, no one would buy a car with no A/C in Texas so I'd have to shell out the $1000 to even sell it. So I'm taking a gamble by not selling it while it's working okay. Either way, we're going to have to buy a new car before the end of residency.
--I'd like to buy a house during residency and we could probably get a decent down payment out of this in the next two years.
And mainly I just worry about the "what ifs?" What if I lose my job? Our regular savings account would get us by for awhile and we could take out loans, but I'd like to have the money there and available to me if we really really need it.
I guess I just need to do the math and see how much it will really cost us in interest to hold onto the money. The most we could really leave med school with is about $70k in loans (about $20k subsidized and $50k unsubsidized) and we have no undergrad or other debt...it seems like so much, but then again it doesn't.
What pieces am I missing here? Would you take out more loans for the full amount of tuition or try and pay back some of it now?
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