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  • Pre-med looking for advice? Savings?

    Hello. I'm new here and currently listening to the audiobook of the WCI. Apologize if this is redundant or belongs on a different forum. Seeking advice

    Recently I was accepted to med school--yay! Problem is, tuition is about 51k, and COL another ~35k. Yikes. My parents are/were both teachers--I'm funding this career myself. Ive been scribing since graduating last year, and combined with an inheritance from from grandfather, have about 50k in savings. I have another 11k in a 401k I inherited from him, which I'm not sure whether I can even touch..? By the time I matriculate next summer, it'll probably be around 60-65k in savings total. I'm waiting to hear back from some public in-state schools which would be more affordable than the one I was recently accepted to, albeit not significantly.

    I have a new, fuel efficient car (purchased 2016) with about a $1500 balance on it at 3% interest. Most of my scribing $$ has gone right into that--technically I have until 2021 to pay off that remainder. Zero undergrad debts thank goodness. I was lucky to get an RA and tutoring gigs on campus, a paid summer research job (all three summers) and a hefty merit scholarship.

    Many of the schools I'm applying to require me to input my parental income information on FAFSA for need-based aid, even though they're not helping me out financially. My mother recently retired (64), but the income year they're looking at is 2015 when she was working full time. Is there some way to reflect this recent drastic change in parental income?

    Is it worth making non-refundable deposits at multiple DO schools ($250) just to compare their financial aid packages? Is having that large of savings going to be punished on my FAFSA? Are medical school financial aid packages all loans anyway, so not really worth comparing?

    Is it worth going to an allopathic school if it's more expensive? Is the MD after someone's name worth more than a DO? (Silly if it is, in my opinion, but genuinely curious).

    One of the things I was considering is purchasing a condo/small bungalo with my cash, then getting a roommate to cover utilities/HOA/taxes essentially. Is this an okay idea, or a very bad one? At least after living there, I'll be able to re-sell, possibly for a profit.

    Should I just flat out empty that 65k towards tuition, to avoid the ~6% interest rates of student loans? Or is it advisable to have a nest egg on hand?

    I'm blessed with my savings, but at the same time I'm not sure how best to use it. If I empty it out towards a condo, would that be more favorable on FAFSA? Having a zero balance in savings?

    Thank you SO much for the advice everyone--I'm afraid I'm a bit clueless. Never in my life have I (nor have my parents) had a significant amount of money, so I'm not entirely sure what to do with it, particularly as I have so many important decisions coming up. My parent's retirement fund is lackluster, and I anticipate having to supplement their income as an attending. Least I can do after they raised me Not sure what speciality yet, although I'm leaning towards ED or psychiatry from what I've seen as a scribe.

    Not eligible for the HSPS scholarship due to pre-existing condition. Not sure I want to commit to primary care through the Health Service Corp--I haven't even done rotations yet, so the idea of commiting to FM/OBGYN/IM/psych/peds this early in my career freaks me out. I have a definite interest in practicing in underserved areas, however. Maybe loan forgiveness would be a good option?

    Unfortunately no wealthy relatives looking to help me out either lol. Also no significant other or children to worry about. Appreciate ALL the advice I can get THANK YOU SO SO MUCH.

  • #2
    Congratulations on getting accepted, and welcome to the forum!

    Since this subforum is for beginners to help beginners, I'll wait a few days or so before weighing in and let some fellow n00bs weigh in first.

    Cheers!

    Comment


    • #3
      Cheapest school that you got into (either MD or DO); your future self with thank you. Especially if you want to go into rural undeserved medicine as you cannot rely on PSLF.

      Medical school education is predominantly self taught and going to a "known" name for 2-3* more is not worth it.

      Comment


      • #4

        • Yes, you can take the inherited 401k penalty-free and with no strings attached. The distribution is taxable, but the next few years should afford a great opportunity to take the money out at low or no taxes.

        • I would not recommend the condo. Use your money to fund school (a cheap school, as recommended by @ACN) and avoid interest accrual


        Congratulations on getting accepted - I hope you stick around the forum and continue to learn from the mistakes others have made. That will probably be worth another $100k or so over your lifetime (at a minimum).
        Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

        Comment


        • #5




          Many of the schools I’m applying to require me to input my parental income information on FAFSA for need-based aid, even though they’re not helping me out financially. My mother recently retired (64), but the income year they’re looking at is 2015 when she was working full time. Is there some way to reflect this recent drastic change in parental income?

          Is it worth making non-refundable deposits at multiple DO schools ($250) just to compare their financial aid packages? Is having that large of savings going to be punished on my FAFSA? Are medical school financial aid packages all loans anyway, so not really worth comparing?

          Is it worth going to an allopathic school if it’s more expensive? Is the MD after someone’s name worth more than a DO? (Silly if it is, in my opinion, but genuinely curious).

          One of the things I was considering is purchasing a condo/small bungalo with my cash, then getting a roommate to cover utilities/HOA/taxes essentially. Is this an okay idea, or a very bad one? At least after living there, I’ll be able to re-sell, possibly for a profit.

          Should I just flat out empty that 65k towards tuition, to avoid the ~6% interest rates of student loans? Or is it advisable to have a nest egg on hand?

          I’m blessed with my savings, but at the same time I’m not sure how best to use it. If I empty it out towards a condo, would that be more favorable on FAFSA? Having a zero balance in savings?

          Not eligible for the HSPS scholarship due to pre-existing condition. Not sure I want to commit to primary care through the Health Service Corp–I haven’t even done rotations yet, so the idea of commiting to FM/OBGYN/IM/psych/peds this early in my career freaks me out. I have a definite interest in practicing in underserved areas, however. Maybe loan forgiveness would be a good option?
          Click to expand...


          You could try submitting an updated FAFSA but I'd guess most of your aid is coming in the form of student loans.

          Yeah, having your own money is going to hurt any chances of need-based aid, generally speaking.  Again, I don't think I'd count on it.  You could call their financial aid offices and ask what you should realistically expect before you send the deposit.  I wouldn't waste $250 over and over again.  There are FAFSA experts out there who can help you navigate this, what counts against you and what does not.

          Yeah, it's absolutely worth going to an MD school, if only to avoid carrying that very heavy DO chip on your shoulder for the rest of your career.      What is the cost difference, cheapest MD school to the DO school you would choose?  Once you've matched into the specialty of your choice, it no longer matters where you went to school (you could argue it's when you land the job), but just getting interviews, let alone matching, is going to be more difficult as a DO, provided of course you're trying for anything remotely competitive.

          Don't buy a condo until you know you're going to live somewhere a long time.  And a roommate should be helping more than just utilities taxes and insurance IMO.

          Again if you think you're eligible for need-based aid, then you should read up/consult experts on this.  However I wouldn't count on it.

          You have a big choice to make here, whether or not to pursue forgiveness.  If you're going to go for forgiveness, there's a perverse incentive to take as much loans as you can possibly get, and stay in your residency as long as you can (up to 10 years).  The responsible thing to do would be to take as little loans as you can, but keep a little cash cushion for yourself in case you need it ($10,000, $20,000, whatever makes you comfortable).  At the end, what little loans you have (which could still easily be >$100k), could still be eligible for forgiveness if you decided to pursue that.  But alternatively you'll take every last dollar of PSLF forgivable loans that you can, and then trickle some of those dollars back after you graduate in minimum PSLF payments, and hopefully watch a big mountain of debt be forgiven, ideally tax-free, at the end.

          Comment


          • #6
            Okay, thanks for your insight everyone. I really appreciate it. I'm leaning towards using my savings towards COL expenses (~16k per year, so I'll probably run out by year 4), and then loans for the tuition. Yeah, my savings combined with my parents okay-ish income means I probably won't be getting need-based aid--bummer.

            The reason I'm considering the multiple $250 deposits is because one school is private and has several merit scholarships, whereas the other is a public Osteopathic school. I know that the entire pool of applicants is meritorious, so paying $250 to gamble at a chance at that financial aid is risky. But in the grand scheme of things, $250 is kind of a drop in the bucket, no? If my undergrad experience showed me anything, it's that the private schools offer a lot of scholarships whereas public ones have hardly any.

            PSLF program is already being discussed being abolished makes that seem very unlikely. Since I won't be eligible to apply until 2022 at the earliest, I doubt it'll be there. Bummer...again. I LOVE this idea. But realistically, I doubt it's worth counting on.

            One of the physicians I scribe for discussed refinancing his loans to about 2% interest? (He graduated medical school in 2004). How common is this? If refinancing loans is so easy, then why is everyone complaining about the 6% interest to begin with?

            Is everyone guaranteed the unsubsidized federal loans, or are these also need based?

            After consensus on the condo/house being a bad idea, I've basically given that up. In order for it to be beneficial on FAFSA in terms of erasing my savings, I'd have to purchase in the next few months anyway, which means I'll be paying a year of taxes and/or HOA fees while not even living there.

            THANK YOU SO MUCH AGAIN.

            Comment


            • #7
              I haven't gotten into any MD schools yet, but have an interview at an in-state one. Here's the breakdown of my schools of choice. All of the schools are in the same general area, so the rent/utilities etc expenses are almost identical.

              DO #1 (private, accepted!)
              Tuition+fees years 1/2: $52,246 per year
              Living years 1/2: $28688 per year

              Tuition+fees 3/4: $52,074
              Living years 3/4: $30108 per year

              DO #2 (public, interview went well but won't hear for another 2-3 weeks--liked this school SLIGHTLY better than #1)

              Tuition+fees+room/board years 1-4:
              71,157
              71,572
              74,310
              73,311

              MD #1 (public, haven't interviewed yet--scheduled in November)

              Tuition+room/board+fees (only listed for year 1 online)
              $63062

              **I have a couple more months before this could POSSIBLY be relevant, considering I only have an acceptance at #1 lol ** But @craigy asked so here it is

              Comment


              • #8
                If we're talking making two or three $250 deposits, yeah, BFD, it really is a drop in the bucket.  I wouldn't worry too much about that.  For what it's worth, my wife put in a deposit at the first school that accepted her before her 1st choice school accepted her, and I don't remember if she got that back.

                What you should be looking at is the tuition & fees number, i.e., what the school is taking out of your pocket and other required costs to obtain your degree.  Their estimate of living expenses is really very vague and you can influence that up and down quite a bit.  I guess if you plan to live on campus and eat their cafeteria food then perhaps that's a real fixed cost.

                That old-timer you're talking about is out of touch, likely did a federal consolidation which, at the time, offered amazing rates, you didn't have to have good credit, you just signed up for the sweet low federal rate.  That is completely irrelevant to you.  These days the federal rate is going to be 6.8%.

                With your acceptance they pretty much hand you the loans.  I'm not sure there's much to "qualifying" for loans except enrollment and having some semblance of a pulse.  Some loans might be subsidized (don't accrue interest) but most will be unsubsidized (accrue interest while you're in school).  Don't let that freak you out too much.

                The horrible 6.8% federal rate (thanks congress) has brought about the relatively recent phenomena of bank refinance of federal student loans.  That's what everyone is talking about when they say they refi'd their loans with earnest, elfi, DRB, etc.  The thing is, you have to have good credit and reasonably good debt-to-income in order to qualify for a good rate, and that usually doesn't happen for most physicians until they're out of residency.  For example, my wife was able to refinance her loans a few years ago during residency with a variable rate in the low 4% range (with me cosigning) and then recently as an attending has refinanced again to a variable rate in the high 2s.

                And then as far as the MD thing, if you get in, absolutely go to the MD school.  Taking a guess at what they estimate living expenses are, it looks like they're probably in the $40s per year for tuition, which is about the same or less than the DO schools.  A lot of DO schools offer scholarships to help fill their rosters so that might bring down the cost.  But even if it was a little more expensive, I'd still choose the MD school.

                That said, don't sweat it if you can't get into the MD school.  Plenty of DO vs MD banter on places like studentdoctor, but personally I think it's better to get a DO school than waste several years waiting to get into an MD program.

                Congrats again on your first acceptance, and good luck on the rest!

                Comment


                • #9
                  Wow, lot's of questions.  My advice, go to the cheapest school you can get accepted into.  Also, go to a school in a low cost of living area to make living expenses super affordable.  DO vs MD is a silly thing to worry about these days, IMO.  Once you start working no one will care what your degree is, including you.  I used to worry about that when I was in your shoes (I'm a DO) and now I never even think about it.

                  As far as home/condo buying during training...DON'T DO IT!  Very bad idea. I can elaborate if you don't understand why this would be bad.

                  I would use your savings to pay for your living expenses throughout school.  Borrow as little money as possible (borrow only tuition if you can).  Live in a very cheap apartment and learn to spend as little money as possible the entire time you're in school.  Read Mr Money Mustache and live by his philosophy.  Those tuition costs are absurd.  When I was in school they were in the sub-30k range and this was just 10 years ago!  Now we're talking about 50k/yr tuition?  That's ridiculous!  If you borrow tuition and living expenses you'll end up with over 80k/year of debt and graduate with over 320k of debt in your name.  With interest accumulating during residency you could end up with 500k of debt by time you start working (depending on how long training is of course).   That's a 1/2 million dollars!  You're very lucky that you have money stashed away to live off of during school.  $60-65k should be plenty to get you through those 4 years if you're careful with spending.  Take advantage of it and avoid debt.  If you live in a low cost of living town during school you can live dirt cheap.  My school was in the middle of no where and I was able to rent a place for 425/month.  Consider a room mate and do it even cheaper if possible.

                  From experience I can tell you that I borrowed the full amount for school and I regret it (though I really didn't have a choice since I had no savings).  I wish I would have borrowed even a little less though.  I went to a private DO school and spent around 30k on tuition and borrowed the full 20k for living costs each year.  I graduated with over $220k of debt (some undergrad).  By time I finished my 3 year IM residency my student loan balance was already in the $250-260k range if I remember correctly.  I'm still paying it off 6 years later (which is also because I didn't live like a resident during my first few years of being an attending).

                  Comment


                  • #10




                    DO vs MD is a silly thing to worry about these days, IMO.  Once you start working no one will care what your degree is, including you.  I used to worry about that when I was in your shoes (I’m a DO) and now I never even think about it.

                     
                    Click to expand...


                    Isn't it still easier to get into competitive residencies with an MD versus a DO?

                    Comment


                    • #11







                      DO vs MD is a silly thing to worry about these days, IMO.  Once you start working no one will care what your degree is, including you.  I used to worry about that when I was in your shoes (I’m a DO) and now I never even think about it.

                       
                      Click to expand…


                      Isn’t it still easier to get into competitive residencies with an MD versus a DO?
                      Click to expand...


                      Yes it is.  DO grads tend to do okay with family practice, pediatrics, internal medicine, and psych.  Derm and surgical residencies seem either biased against DOs or quite challenging for DOs to get into.

                      Comment


                      • #12
                        I am not going to get into the argument, but a DO school makes it harder to match in some specialties and restricts geographical options. My program (anesthesia) does not rank DOs. It makes it harder, not impossible.

                        Comment


                        • #13
                          Yes, I should have mentioned that it can be harder to get into certain specialties as a DO, especially the more competitive fields/programs and specifically any program that is predominantly MD already.  So, if you think you'll be interested in going into a very competitive field (such as a high paying surgical sub-specialty, ophthalmology, derm, etc) or if you're interested in finding a top academic spot somewhere, then getting into the best MD school you can find is important.

                          For what it's worth, I have DO friends in Ortho, Gen Surg, ER, Cardiology, and I even remember a guy in my class that ended up in Neurosurgery.  So, it's harder, but not impossible.  MD is clearly better for people who want to get into the top academic residencies though, no question.

                          Comment


                          • #14




                            Cheapest school that you got into (either MD or DO); your future self with thank you. Especially if you want to go into rural undeserved medicine as you cannot rely on PSLF.

                            Medical school education is predominantly self taught and going to a “known” name for 2-3* more is not worth it.
                            Click to expand...


                            Cheapest *good* school.

                            Although it feels early you have to know whether you want to do a competitive specialty or not. If so, the name matters and yes, MD is better than DO. If you want to do a less competitive specialty, you can look at cost as a primary factor.

                            I always knew I wanted to do a less competitive specialty. Of the schools I was accepted to, one was a clear winner in terms of value proposition (quality, reputation, price) and that's where I went. One of the best financial decisions of my ilfe.

                             

                            Also, I'll push back a little on the condo idea. It depends. I had a unique opportunity where I attended school. I was granted in state tuition beginning the second year if I owned property. I bought my first year, my roommate paid for half of my mortgage, and I got in state tuition for 4 years (the first year was a grant). When I graduated I sold the condo and used the appreciation/proceeds to pay off a portion of my med school debt. So you have to look at your specific situation before dismissing property out of hand.

                            Comment


                            • #15
                              If you get into the MD school, go there. Not only is it cheaper, but you won't run into any possible DO problems when applying to residency. It doesn't matter in some fields and locations, but it does in others.

                              If you don't get into the MD school but do get into the other DO school, go there. You like it more and it looks a little cheaper.

                              Do all you can to reduce your living expenses during med school, choose a specialty wisely (hopefully you like something best that pays average or better), and then figure out whether you'll do PSLF or pay the loans back during residency. But plan on living like a resident after residency for 2-5 years. That's the real secret to financial success as a doctor.
                              Helping those who wear the white coat get a fair shake on Wall Street since 2011

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