Financial Aid

[MrsSz]

Oh em gee. We just got our financial award notice for first year. Yikes. I feel like I was punched in the stomach. I knew it was expensive and all, but my oh my, it's hard to see what you'll be borrowing right there in black and white. Any advice you all wish you had right before M1?

[Vanquisher]

Yeah, refund the money and go into something else. In all seriousness, I would have done my damnedest to convince DH not to go to med school.

Besides that, spend as little as possible whenever possible. There's not really anything I would have done significantly different though even with all the best advice in the world. Sometimes you just have to live.

[spotty_dog]

Um, so this brings up a question I had from your last financial question. You mentioned that he is going to be contributing to the family finances by way of loans, and you are going to be contributing your salary...my question is, WHY is he taking out loans for living expenses if you are earning income?

Borrow as little as possible, period.

[diggitydot]

It you can swing the living expenses without taking out more loans, do it.

[medpedspouse]

It you can swing the living expenses without taking out more loans, do it.

Yes this. BUT in our case, he had to contribute to the house via loans...AND mind you, we waited one year after undergrad until I already had my master's so I could earn a little more when he went to med school. It really depends on the COL of where you are going to be. We only borrowed the minimum to make ends meet and I have no regrets because I could not have supported us both otherwise.

[oceanchild]

I agree with the above, don't take loans for living expenses unless you absolutely have to. We did for the first year (and some of the second), and I wish we hadn't.

[v-girl]

If you need loans for living expenses, can you cut back on some things until you make enough to pay them out of your paycheck? Med school was covered through DH's MD/PHD program. My paycheck and his small (~1200/mo) stipend covered mortgage, cars, childcare, food, etc. No cable TV, no big vacations, clothes bought on sale/clearance, etc. DH is a fixer guy so he, his dad and his cousin took care of household repairs. I'm so glad we lived this way as we will come out of training with only typical consumer debt (mortgage, car).

[spotty_dog]

My paycheck and his small (~1200/mo) stipend covered mortgage, cars, childcare, food, etc. No cable TV, no big vacations, clothes bought on sale/clearance, etc. DH is a fixer guy so he, his dad and his cousin took care of household repairs. I'm so glad we lived this way as we will come out of training with only typical consumer debt (mortgage, car).

Yep. Culture tells you that a young married couple "should" have all those fancy things, but ignore culture. Make it work on what you have. I was a college secretary and my salary paid our living expenses during medical school. We didn't live lavishly but we were comfortable enough. Hand me down furniture and a run-down apartment kept so cold in winter you have to wear gloves inside aren't glamorous, but being debt free at the end of training is priceless.

[TulipsAndSunscreen]

Don't do the "it's a drop in the bucket" thing and spend minor amounts thru med school because you have the loan money. Dh had friends who's "drop in the bucket" $5 here and there added up to 10s of thousands of additional spending.

We took his loans and banked any extra we had (I was working but there was a chance we'd need the money so we took the loans each year). Now we have a small lump sum to apply to our house down payment to start residency.

[GrayMatterWife]

Borrow as little as you need, spend only what you must, and remember that your money costs you money.

[diggitydot]

The nickel and dime shit takes a toll. DH gets himself into trouble this way all. the. time. Drives me nuts.

[houseelf]

Please leave this website right now and go to Whitecoatinvestor.com. Among other things, he advises what a realistically manageable student loan balance versus annual income should not exceed.

I believe he said total student loan debt should never exceed 75% of an annual income. For example, an ER doc earning $200,000 should not owe more than $150,000 or the payback amount becomes unwieldy and burdensome. It's one thing for us to caution you not to take too much out, it is another thing to see the concrete ratios. He aslo talks about the reality of choosing a specialty when too much debt is on the line.

Seriously, go google white coat investor right now.

[Michele]

I had no idea about any of this when I borrowed mine and he borrowed his. I trusted him and he followed the "drop in the bucket" idea. We owe so much it's ridiculous! And the student debt is bankruptcy proof. If I could advise my 20-something self, I would NOT have encouraged taking the max they would give me!! But I lived and learned....so if you will, please heed our advice.

[MrsSz]

Spent last night calculating like crazy... and researching. Our biggest problem is his student loan debt from undergrad [way before me! ]. He is a first generation college student, so his parents did all the financial aid on their own, without help from the school. Everything from undergraduate is in private, non deferrable, non consolidate-able, private. I am fortunate to have a great job, which makes things like house buying an actual possibility. It's so crazy to me that we are going to have to use a chunk of loan money to pay on student loans. I don't even want to know what that calculates out to as far as actual cost. Aside from that, I can cover a majority of it. Can you take the loans out and then give them back if you don't use them? I've been reading so much about residency and applying for it, that does it make sense to put extra into a high yield savings account for costs like that? If I can find something CD/savings account that has a great rate. I've come to the realization that no matter what we change now, we are going to have student loans that highly exceed the cost of our mortgage!

[diggitydot]

There really isn't such a thing as a "high yield" savings anything right now. Interest rates are ridiculously low. My grandfather keeps a few of his investments in CDs and his highest earning one is at 0.05%, the rest are at 0.01%. That isn't a typo.

Truthfully, your best bet is to take as little as possible in loans and live like poor, starving students until AFTER RESIDENCY. I'm not kidding. Live in a shitty apartment, eat a lot of beans and rice, and don't incur any more debt than absolutely necessary to provide food, water, and a place to live for yourselves. Med school and residency are temporary. Insane student debt follows you FOREVER.