Private Loan versus Savings

Hi, I will be starting my expensive post-bacc this summer. Because of the timing, I will not elgible for federal loan/financial aid for the summer term. They only give out private student loans - like CitiAssist and FannieMae. The interest rates are comparable to the the federal rate, but they cannot be consolidated later and are variable for the life of the loan. I have about $15k saved up. I was wondering if I should use the $15k to pay for living expenses and tuition over ths summer…and waiting until the Fall/Spring and use the remainder (if any) of my savings as well as federal student loans to cover the costs. Does this make sense? Also, a problem is that I have a very high salary now…I lived in Manhattan for all of 2003 and therefore squandered most of my salary on rent. I’m not sure how that will affect my financial aid award. I know I have no chance of getting any sort of grants, but I think I could still qualify for stafford loans (even if unsubsidized). When I was in law school, it said my EFC was $18k bc of my parents salary, but my parents weren’t going to pay for it, so I ended up taking out loans to cover that amount. I don’t know…I’m so confused by this whole process. I suppose there are several issues here:
1. Would it be better to use my savings, instead of taking private student loans?
2. How does a high salary affect my elgibility for federal stafford loans?

In short:

1. Yes

2. It doesn’t. It may effect your eligibility for $8,500 of the maximum $38,500 per year being subsidized. But otherwise, no affect.


It may effect your eligibility for $8,500 of the maximum $38,500 per year being subsidized. But otherwise, no affect.

I’m not sure I understand…it may affect my ability to get the $8,500 in subsidized stafford loan…but not my ability to get the loan, right?

right, with an unsubsidized loan the interest will accrue while you’re in school (though you’re not making payments). Note that $38,500 per year is for medical school only. I think it’s less for undergrad and I am not sure if you can get Stafford loans for post-bacc programs. The post-bacc program you’ll be going to would be the best place to sort this out - they really should have a lot of financial aid information (if they don’t, shame on them, that’s a service that should be included in your steep tuition).