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which student loan to pick?

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  • which student loan to pick?


    I am starting dental school in 3 weeks and i just got my financial aid package through the school for Direct Unsub Loan HL-10 $42,000 at 6% interest rate and Direct Grad Loan Plus $40,000 at 7% interest rate. For a total of 82,000 in loans for my first year. Should i look for an outside private loan with a smaller interest rate such as Stafford loan ? I don't quite know what to do. Or do i refinance after i graduate for a smaller interest rate? Any advice would be greatly appreciated.

  • #2
    Take as little as possible.


    • #3
      OMG. 84k/yr and you're on the hook for the whole thing?


      Step 1-reconsider

      Step2- learn to live frugal now, never spend or take out more than is absolutely necessary. find some way to make money while in school, tutoring, etc...


      • #4
        I haven't heard of people finding better rates through private loans. There are benefits to federal loans over private (forgiven at death, pslf for now, etc) too.


        • #5
          You can look for private loans, but my understanding is that the lenders who do them will give you higher rates than what you're getting. Once you have a high income you can definitely refinance.

          But I totally agree- 82K is a LOT for one year! Are you taking out the entire estimated cost of living? Start doing some math on what you will actually need, and make decisions that will make that number as low as humanly possible, and only take out that amount. This means you will have a roommate or 3. And get a part-time job. I taught MCAT classes while in med school and it was so nice getting gas and groceries on my way home from teaching a class knowing I wasn't paying 6.8% on those purchases.


          • #6
            Are you physically and mentally fit with a clean criminal record? Have you considered applying for the military's Health Professions Scholarship Program?

            My wife did dental school and a surgical residency through the Air Force. Compared to taking on $376K+ in debt at 7% to make ~$120K a year as an associate general dentist at Aspen, Heartland, or Western Dental, a few years in the military doesn't sound so bad.

            You should do it because you want to serve your country, not just for the money. (Otherwise you might be miserable.). But you may want to consider it if you're at least halfway inclined.


            • #7
              While that's a load of debt, at least it's for a good school and career path. You're here asking, so you're starting out well. Congrats, and congrats on starting school.

              I did, and recommend taking 100% of the money possible for the first semester, put the "living" money in a high interest account, and really learn/budget and see what you actually need. You need a small emergency (read: funeral travel fund, or buy an old bicycle when you're breaks (not car!)). Once you have a budget you can follow, then you can take much less funds during the subsequent semesters. Remember, you'll have expenses 12 months of the year, not just the 8 you might be "in school". (this depends on the program, etc). IF you have extra extra money, you can return it to the loans.

              Obviously, if you have a clear budget and plan for finances this year, you can start off taking less, you also need some restraint not to spend the money just because you "have it" if you take out extra now.

              I'd not do any private loans, I've never seen a decent or fair one. Also, you should plan to refinance after you graduate. (and exploring repaye/PSLF/military/etc options are good too).


              • #8
                So Stony Brook Dental school tuition is 35,000 plus schools fees 2,000 and lab fees and equipment are another 22,000 ===about 61,000 in tuition and fees. The remaining money of the 83,000 suggested to take out for the loan is what they estimate we will spend on housing, groceries, gas etc.....

                If i take out the 61,000 and not the 83,000 i don't know how i will pay for living expenses. MY fiancé will try to support me but he has a lot of student loans he is finishing paying off and a car loan which doesnt leave us with a lot of money to live off of.


                • #9
                  That is a great idea. i think i will take out the max and then see how first year goes. then decide how much i need to take out next year. thank you



                  • #10
                    yes 35,000 tuition at stony brook. school fees, lab equipment 22,000===61,000

                    then the rest is what is suggested to take out for living expenses.


                    • #11

                      MY fiancé will try to support me but he has a lot of student loans he is finishing paying off and a car loan which doesnt leave us with a lot of money to live off of.
                      Click to expand...

                      I'd not burden a significant other until married and had a clear (likely written) financial plan. On that note, if you haven't already, this is a great time to start those conversations about finances with the fiancé. Furthermore, the fiancé shouldn't support you just because you might need loans, it should only happen if it's discussed, agreed, calculated, and is actually the best financial choice. (it may not actually be!).

                      (and congrats on the engagement).