Graduate Student Loans

[Samac]

Hey guys I'm finishing up my first year of medical school and our financial aid counsellors are mildly useless other than dispersing loans.
For year one I didn't take out max cost of attendance, only what I needed. But it's actually hurting my credit score because I have them in deferment so they're just gaining interest and I'm taking a hit for loan balance in reference to loan amount.

So for year two what is the better option, take out max cost of attendance and pay on them or continue to take out only what I need and defer them? Any advice is appreciated.

[SCF]

Honestly, I wouldn't worry about the impact of installment loan utilization on your report.  It's usually quite minor, and your overall credit report won't raise any red flags on a manual review because it's a very common situation for medical students.

Borrow the amount that you need to get through school, and be as frugal as you can without jeopardizing your ability to do well in your studies.  Your primary concern should be your total borrowing vs. your future salary and financial goals.

[Samac]

I was actually rejected for a credit increase because of the proportion of balance on my installment loans compared to loan amount, that's why I became concerned. Thank you for your input!

[Anonymous]

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@SCF wrote:

Honestly, I wouldn't worry about the impact of installment loan utilization on your report.  It's usually quite minor, and your overall credit report won't raise any red flags on a manual review because it's a very common situation for medical students.

Borrow the amount that you need to get through school, and be as frugal as you can without jeopardizing your ability to do well in your studies.  Your primary concern should be your total borrowing vs. your future salary and financial goals.

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Very much this (the bolded part).  Conventional wisdom is to limit your total student loan debt to one year's median salary for your chosen profession, which you can find by going to http://www.bls.gov/ and typing your intended occupation into their search.

I did not do this, and as a result have to look into various options for loan forgiveness to have any chance at paying off the massive total student loan amount I took out.

[Samac]

AHAHAHAHAHA one year median salary.
I'm in medical school.
My loans will be about $240k when I graduate.
As a resident for the first 3 years my salary will be about 50k, after that I'll go up to 150k. I knew I was screwed in that aspect going into it.

It is a good thought though.

[Anonymous]

This is quite insane to say the least...

I am going into my 3rd year of my undergrad for business administration/small business and have only taken out 7k in student loans. I expect to take out a total amount of 15-18k once I am done with my undergrad as my mother has made more money which is a big no-no according to FAFSA. Let's say hypothetically I make 40k/yr starting out as a manager somewhere. Well my ratio would be max 18k/40k=45%. I think I have done fairly well when stacked up against other students I have met. This girl who I met went 3 years into an RN program and decided that she didn't like it anymore and started over as a criminal justice major *facepalm*. She accumulated 45k in student loans alone for her first 3 years because she went to a big school like Purdue and stayed on campus. My humble self on the other hand went to a small state school and have lived at home with my mom while also working on my credit. I hope everything pans out for you and you see a big ROI on your Grad program!

[Samac]

I appreciate it Tony!

The problem with med school is tuition alone is 44k/yr. We're not allowed to work a second job (like we would have time lol) so we also live off loans. No med schools close enough to my home to just play that game. So here I am paying tuition, while only living off about 14k/yr. it's all un subsidized at this point in the game too.
I'm just fortunate I don't have debt from undergrad.

[Anonymous]

Yeah no problem! As a fellow college student I wish you nothing but the best and hope that you get a great ROI from your years of hard work and dedication! I couldn't imagine paying 44k/yr in tuiton as my current college is just 7k/yr and I thought that was bad haha  

Also that is great that you managed to graduate your undergrad without any student loans. I just wish that our government was more helpful and gave out grants to kids who earned good grades like you and I(I assume you are considering your a med major). I achieved a 3.6 gpa this year and am only getting $400 in academic excellence awards :/ 

I've also thought about joining the Army ROTC programs to help pay my last few years and to get a guaranteed job, but I am moving so that will have to be put on hold. As I said before I wish you nothing but the best and if you ever need credit counseling from a young guy like me just PM me!