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Should I take out federal student loans for med school?

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  • Should I take out federal student loans for med school?

    Hi all,

    I'm a current first year medical student, soon to be second year, and I'm in need of some guidance regarding student loans. Luckily I was able to get through undergrad & grad school debt free. I attended undergrad internationally so it was free and my family helped pay for graduate school.
    I took a private loan from my family to fund my first year of medical school but I don't think I want to continue with this for the remainder of med school. While there is so much information out there about federal loans, I'm still having trouble figuring out the best route to take.

    Two main reasons why I now want to take out federal loans:
    1. Possibility of getting federal loan forgiveness in the future
    2. Dealing with family & money has been challenging and I don't want to ruin family relationships

    I have about $20k in personal savings, yearly tuition cost is $60k, I'll probably have to borrow about $80-90k a year in loans to also cover cost of living
    At the moment I've borrowed $80k from my family (interest and payment will not start until I have graduated residency)

    So my question is, should I take our federal loans? Or suck it up and borrow interest free (for now) from my family?
    Feel free to ask for more info if needed

  • #2
    Fed loans - absolutely. Best way forward on options and opportunities for forgiveness. As you've already experienced, private loans with family can mess things up if not carefully made for the right reasons and time.

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    • #3
      Yep - based on the info provided, I’d sure take the federal loans.

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      • #4
        I'd do it strictly based on the second reason you provided.

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        • #5
          Scholarship >>> federal loan > private loan >>>>>>>>>>>>>>>>>> family loan

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          • #6
            Are you an only child? If so, and depending on family dynamics, it would be difficult for me to suggest passing up an interest-free loan, even from family.
            Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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            • #7
              Judging from your post, it sounds like the family loan is already becoming an issue. If so, federal loans would be the next best step.

              Also, you may not need what the full cost of attendance is that they are offering you. You likely aren't going to be spending $30000/year on top of tuition. I'd look for some ways to reduce that if you can.

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              • #8
                "2. Dealing with family & money has been challenging and I don't want to ruin family relationships"

                There is a price to be paid. However, if you can't limit it to just the loan, you have no choice.

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                • #9
                  Originally posted by jfoxcpacfp View Post
                  Are you an only child? If so, and depending on family dynamics, it would be difficult for me to suggest passing up an interest-free loan, even from family.
                  I don't think they mentioned it was interest free. What is the rate @cobalamin?

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                  • #10
                    Originally posted by childay View Post

                    I don't think they mentioned it was interest free. What is the rate @cobalamin?
                    >>So my question is, should I take our federal loans? Or suck it up and borrow interest free (for now) from my family?<<
                    Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

                    Comment


                    • #11
                      Originally posted by jfoxcpacfp View Post

                      >>So my question is, should I take our federal loans? Or suck it up and borrow interest free (for now) from my family?<<
                      OP doesn’t sound like a snowflake. Ruining family relationships is a qualitative term. Interest is quantitative. I would not advise sacrificing family for free interest. Need more details on the difficulties and what “suck it up” entails. It should not “ruin family relationships”. Seems like terms and conditions can be found.

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                      • #12
                        Originally posted by StarTrekDoc View Post
                        Fed loans - absolutely. Best way forward on options and opportunities for forgiveness. As you've already experienced, private loans with family can mess things up if not carefully made for the right reasons and time.
                        I'd certainly look into federal loans. You have lots more flexibility in repayment and loan forgiveness. In particular, as a resident or fellow, IDR could provide you cash flow relief with lower monthly payments and interest subsidies. On the other hand, private student loans don't have this flexibility, and often residents can't make their large private student loan payments and opt to forbear instead of pay.

                        Then, when you have that attending job offer, you can decide whether to go for loan forgiveness or private refinance.

                        Bottom line: Federal loans provide you more flexibility and time to decide as your situation could change drastically over the next 3-5 years.
                        Helping student loan borrowers manage their student loans. StudentLoanAdvice.com. [email protected]

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                        • #13
                          If family loans aren't a good option due to family dynamics, then go with fed loans. But more importantly, focus on spending less. Tuition/fees you're stuck with, but you should be able to live on less then the 20-30k you're describing. Now is the time to live with roomates and budget aggressively. Also while we are far from the days where you can work your way through school and med school is busy, even a small income from a side job during first and second year can go a long way. Tutoring is usually a good choice due to decent pay per hour and flexible hours.

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                          • #14
                            Borrowing from family is not recommended, or if you pursue that route further, a written contract would be useful to have, however awkward it may seem.

                            Definitely recommend federal loans.

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