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Loans during fellowship

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  • Loans during fellowship

    I recently made the decision to go back into training (2 years) after time as an attending. I refinanced 2 years ago and have about 8 years left on a 10 year plan. Basically I will have those two years of loan payments saved (about 80+k) in order to make each payment during fellowship. I wonder if there is a better way to use this money rather than have it sit in a low earning account over the 2 years just to be slowly deducted each month. Thoughts? Thanks so much for any insight.

  • #2
    Ideally you would just go ahead and pay the 80k right now so that you decrease your principle balance and thus lower your interest that accumulates. But that requires either: 1) your student loan servicer lets you suspend payments during fellowship; or 2) they consider the 80k as prepayments and not additional payments, thus making your next payment due date not until after your fellowship.

    If you can't do either of those I'd leave it parked in something safe, even if that means you are not getting any significant return on your money.


    • #3
      2 years is not enough time to do anything else. Pay it off or leave it in cash.


      • #4
        No, there is not something "safe" you can do with that money in those 2 years. You are confusing your priorities. See this blog post.
        My passion is protecting clients and others from predatory and ignorant advisors 270-247-6087 for CPA clients (we are Flat Fee for both CPA & Fee-Only Financial Planning)
        Johanna Fox, CPA, CFP is affiliated with Wrenne Financial for financial planning clients