Where to keep student loan money?

[Erbo94]

Rising MS1 here, and this will be my first time using student loans for living expenses, books, supplies, etc.

At the beginning of each semester, the school will take its tuition/fees money out of my loans and then disburse the rest to me in one lump sum. Where is the best place to keep this money as I use it? I have an Ally savings account so that is where I was planning to keep it, but I'm interested in hearing other ideas. I am aware of the transaction limit, but I don't see that being an issue.

Also, does anyone have other tips/tricks for student loan management while still in school?

Thanks!

[Zaphod]

Why do all the MS1's keep saying "rising"? What is this and when did it start?

[RogueDadMD]

Only take out the loans as you need them, don't take all of it out at once for the entire year.  Save a lot of money on interest that way.  Dr. Amanda Liu's idea and a good one.  Ally is fine -- just don't play poker w/it the way I did.

[Erbo94]

Zaphod wrote:

Why do all the MS1’s keep saying “rising”? What is this and when did it start?

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"Rising" as in I haven't started MS1 yet. I suppose that's redundant based on the fact that it's June, but I've heard "rising (insert year in school)" since high school.

[Dr. Mom]

Put the lump sum into your Ally account.  Once a month on auto pay move that month's budget into your checking account.  Learn to stay on budget and even save a little.  Basic financial strength training like this will serve you very well in the future as your budget and income grows at each stage of your life. Best wishes!

[Zaphod]

Erbo94 wrote:

Zaphod wrote:

Why do all the MS1’s keep saying “rising”? What is this and when did it start?

Click to expand…

“Rising” as in I haven’t started MS1 yet. I suppose that’s redundant based on the fact that it’s June, but I’ve heard “rising (insert year in school)” since high school.

Click to expand...

I think it used to be incoming, will be, starting, etc...'rising' just sounds so weird. Must be some sort of affirmative ultra spiritual new thing. Im a rising geezer.

[Dreamgiver]

yes, 1 tip, minimize what you borrow. Get a roommate, pack lunch, drive an old car, etc etc. Good luck in med school, it will exceed anything you have ever imagined.

[Dicast]

High yield savings account is a good place to start.  If they let you take it out as you need it, even better.  I can still remember the financial aid lady talking to all of us about keeping our costs down, borrowing as little as possible to limit our future interest...most everyone kinda brushed off the talk.  Now I hear about crushing student debt all the time.  I can tell you it wasn't exactly fashionable to live at my parents' house during the last 2 years of med school but it cut my costs dramatically.  Despite being at home, I even managed to date and marry my physician wife during that time   .

[DMFA]

You absolutely cannot lose it...so high-interest savings is about as much as you can reasonably earn from it.

Keep it away from your day-to-day bank so you don't even see it, and just set up a monthly or 1st-and-15th transfer for it.

Online accounts like Ally should fit the bill pretty well.

I would budget for one month after when you would expect to receive your next disbursement just in case the next semester comes late, so if you have $14,000 and you'll get your next disbursement 6 months later (would be $2,333.33/mo), then do it over 7 months and pull out $2,000/mo.  A bunch of us had this happen during school.  I put the difference on credit cards that I didn't pay off for a few years...bad move.  If I hadn't had SCRA which kept the rate at 5% then I'd have lost a lot to interest on that.  If you have any left over, you can just take out a bit less next time.

[adventure]

Welcome. Good question. Rising White coat investor too!

Agreed. Take out only what you need. If you take the full amount for semester one, fine, just have a budget and determine if you have to do the same for year 2. (make sure you budget for summer time too).

Keep the cash in an online high yield savings. Ally, Barclays, etc. We just googled for the one that pays the highest %.

 

[adventure]

Erbo94 wrote:

Also, does anyone have other tips/tricks for student loan management while still in school?

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1. Do you have a budget spreadsheet for the first year?

2. Do you have a place to keep track of all the paperwork (paper and/or electronic) for all loans? Keep a spreadsheet of all loans. Loan Id, disbursement date, amount, % rate, any potential notes about % rate discounts (e.g. pay on time for x months, once you start), public/private/stafford/etc. And, it's really helpful to add a column for expected monthly payment to each loan. A column for (5 years, refinanced at a great 3% rate), standard 10 year @ 6.8%, or extended, or PSLF, etc). Give some perspective as to how much these these will really cost.

(keep a spreadsheet, otherwise you'll lose a loan, then find out your spouse owes an extra 52k you both never new about).

3. Have you read the WCI book?

4. check your credit 2-3x/year (https://www.annualcreditreport.com) to make sure you don't have any extra loans, credit cards, debts you didn't expect.

5. Don't forget to have enough saved, or a way to fly home for a funeral, if needed. Thimk of this as a start to an emergency fund.

6. Maybe have a spreadsheet tab for net worth too. Ours is yearly. At risk of it seeming dismal, it's good to keep an eye on the total debt to asset ratio.

7. Have some fun in school too.