Hi all,
I am so confused about how I am going to pay for school. I just filled out my FAFSA renewal and the amounts on their web page say you can only borrow $18,500 unsub Stafford loans. I thought it was $38,000. Where did I go wrong?
My tuition alone is $29,000. My stupid EFC says I can contribute $20,500 which I can’t, so how I am going to pay for school???
HELP!!!
First, stop, take a deep breath & relax! The EFC (expected family contribution) does not mean that you must actually contribute that amount. My EFC throughout med school was in excess of 25~28k/year & I was still eligible for in excess of $50k/year in loans. Largely the FAFSA & student loans are voo-doo!
Tuition is only a part of what is considered the “annual cost of attendance”, which is what is should take a single person to pay tuition, books & fees & live, eat and what-not in the community in which the med school is located. From what I have encountered, the “annual cost” is usually more than double the tuition. My school was around 26k~28k/year and my annual cost around $50+k/yr.
Essentially, the EFC comes into play in how your loan package is mixed. Basically, painting in broad strokes, there are 3 loan types: subsidized, un-sub and private.
Sub: any grad student is eligible for up to $8500/yr
Un-Sub: any non-med grad student is eligible for an additional $10k/yr; but med students are eligible for an additional $20k un-sub (this replaces to old HEAL loan progam) for a total un-sub eligibility of up to $30k/yr
Private: eligibility only limited by max figure determined by the Feds (I think they smoke funny tobacco, chant, dance & pray to Donald Trump to get this figure). Essentially, your private loan amount is Fed max minus total sub + un-sub you take.
Again, my EFC was larger than the one you gave & my tuition lower for every year & I was eligible for approx $50k/year in loans. Long story made short, if the school wanted you badly enough to admit you, they will make certain you can afford to attend - that does not mean they will make allowances for a “lavish” lifestyle or pay off all of your outstanding debts, but you will be able to attend.
Thanks Dave, I knew I must be wrong and I am glad to find out I was wrong. So I am following your advice… Taking a deep breath now and…Relaxing. 
Actually the loan limits are even higher than what Dave’s given here. Subsidized maximum is still $8500, but you can (and I do!) borrow $38,500 with every last penny of it unsubsidized if that’s the only way you can do it. I have lots of classmates getting private loans to cover the rest of their annual budgets… scary as it is to contemplate, there are many students graduating from my school with well over $200K in new debt.
and like Dave said, the EFC is voodoo; don’t pay any attention to it. There is a formula that schools apply for looking at your EFC to see how much unsub vs. sub you’ll qualify for. I forget how they did it, but in my first year of school (when I had TWO kids in college), I qualified for the subsidized maximum of $8500 and got the remainder as unsubsidized. Since then, one kid graduated from college and I haven’t qualified for subsidies, which means I have regretfully accrued several thousand dollars in interest.
But ya know what? The first two years’ interest rates were ridiculous enough, at something like 6%, and the second two years are at something around 3% so, not to worry! I will be consolidating the whole thing into a ridiculously cheap loan package and it is definitely all worth it.
Amy,
What Dave said was right on about financial aid. There is plenty of different types. But, Dave, I have to ask:
Your usual EFC is 26-28K /year?!?!? Damn! My EFC is usually under $4,000!! LOL I must really be poor!
Kathy
Hi Mary,
Thanks for your post. From another Vienna res., it’s great to hear there’s still hope for a “boomer” to go to med. school.
Amy, I have to echo the others here and say it’s probably going to be all right. Really! I also had an EFC of ~15,000 + dollars for my first year of med school; (don’t remember the exact figure, but I remember that EFC figure was a bit breathtaking).
Investigate all the loan options you can.
If you haven’t done it already, order your credit report ASAP. (Yesterday would be good! ) Look your report over for anything that’s out of line. Close any accounts you can (like store credit cards…even if you aren’t carrying balances on the cards). Creditors of course look at the total amount thay you COULD get into debt with your current total credit line maximums on your credit cards, lines of credit through your bank and elsewhere, etc. Pay off any bills and loans that you can prior to coming to med school. IOW’s, simplfying your financial life before med school will make the loan process easier and less stressful. Easier to get the loans you need too.
Very important in this process is your loan repayment history and your credit score on your credit report. That will determine how readily you can obtain loans.
Hope that helps! 
See you next year at VCOM! …
In checking out your credit, as Mary suggested, it is a very good thing to get that in order before financing your med school. Carmen at Now$Loan gave us a really good presentation about that. Keep in mind, though, that when you close unused accounts, as I did, it can temporarily drop your FICO score, as your credit worthiness is also based on the age of your accounts. If you find yourself closing your longest-held accounts, you might actually see your credit score drop. Even so, I don’t regret closing accounts. I closed 11!!
Kathy
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In checking out your credit, as Mary suggested, it is a very good thing to get that in order before financing your med school. Carmen at Now$Loan gave us a really good presentation about that. Keep in mind, though, that when you close unused accounts, as I did, it can temporarily drop your FICO score, as your credit worthiness is also based on the age of your accounts. If you find yourself closing your longest-held accounts, you might actually see your credit score drop. Even so, I don’t regret closing accounts. I closed 11!!
Kathy
An excellent point!
Yes, simplify your financial life. If you have a few credit cards, take a close look at them and make your decisions. If you have 10, 20 or more, you’ve got some real “housecleaning” to do, IMHO.
Is there any financial advisor at your school currently that can counsel you on this issue? Best of luck with this!
Thanks for the info Dave. Did you, or anyone else that has posted on this thread, have a spouse that earned a moderate income? I am just wondering if this has an impact on the financial aid package. I have searched extensively on this, but this item seems very school specific, or maybe even individual specific.
oh, yes, spouse income is definitely part of the picture. When you fill out the FAFSA (free application for federal student aid, done on the web) you are essentially transferring income information from your tax return. The income figure is right off your 1040. I don’t know how it’s handled if you and your spouse file separately but I am quite sure that is not enough to avoid reporting your spouse’s income as part of your financial support picture! You’ll also list dependents and their ages; I forget exactly how it asked for it, but I know I indicated that I had kids in college and that was definitely factored into my EFC (estimated family contribution). (the FAFSA I filled out as the parent of my college kid did NOT allow me to indicate that I was in school also, and so the EFC on his form was higher, go figure.) You’ll be asked about account balances for things like investments (but NOT retirement accounts, if I remember correctly).
Then there’s a section that is intended to be completed by the applicant’s parents. It’s been my understanding that adult married medical school students are not required to complete this portion UNLESS they want school-based aid, that is, not just federally-supported loans. However, this does vary from one school to the next. I have never gotten my parents’ information for my forms because I knew that I wouldn’t qualify for needs-based aid under any circumstances, so why go to that hassle?
Everyone does a FAFSA to qualify for financial aid. Many people fill out a lot of additional paperwork generated by the schools themselves, in order to qualify for grants and scholarships. But based on the FAFSA and my experience as the spouse of a formerly well-paid IT consultant, I conclude that everybody can at least qualify for a non-subsidized Stafford loan. 
Mary
When you say pay off any loans you can do you mean student or just private? I will have student loans(as i am sure most who enter med school after borrowing for formal or even informal postbacc programs do)-will they frown upon that and will that decrease what i can borrow for med school?
eeek i hope not-there’s no way i will pay them off by then 
Melanie
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Mary
When you say pay off any loans you can do you mean student or just private? I will have student loans(as i am sure most who enter med school after borrowing for formal or even informal postbacc programs do)-will they frown upon that and will that decrease what i can borrow for med school?
eeek i hope not-there’s no way i will pay them off by then
Melanie
Good question! No, you don’t need to pay off any undergrad, grad or other school loans. Financial aid loans just go into hibernation while your in med school; see your financial aid advisor about this as soon as possible once you’re accepted to see how this works. You can also find out on-line.
When I say “pay off loans”, I mean credit cards namely! They are a great way of paying for yesterday’s purchases tomorrow!
And it amazes me how many people have too many credit cards. Of course paying off loans is hard to do when you’re also paying application fees, travelling to interviews, etc. But paying off credit cards, or paying them down, helps “clean up” financially. You’ll have less bills to deal with while your in school too.I suggest that you keep one account for household expenses and one account for educational expenses (i.e. tuition, fees, books, etc.) It’s easier to keep track of money and your budget.
(My husband and I have 1 credit card, used just for emergencies and travelling. We also have ATM/check debit cards to our household account and my educational account. That’s it! NO store cards, no wallet full of credit cards. Simple! Works for me!
) Good luck!
Mary
PS Right here, on OPMs, you can get some general advise, as well as the creditr reporting agencie’s info, from Now Loans. Check this out:
http://www.nowloans.org/money_management_1011.htm
http://www.nowloans.org/myths_urban_legends.htm
Again, good luck!
phew!!! thanks mary! i only have one credit card and i have learned from past debt nightmares that one is all i need!
melanie
Hi there,
If you have previously borrowed money from the feds; you may not be eligible for subsidized loans. The max for subsidized in $8500 per year so you have to make up the difference in unsubs which may not be a problem. What is a very difficult problem would be if you defaulted on any previous student loan. You would not be eligible for anything from the feds and would have to rely on private loans. Also, look into the payback of any private loan source. A couple of my classmates got burned with the NoWLoans in that you may have to begin paying those back during residency when your income is in the $30K range. I took the option of paying only the interest on my loans as I have more subsidized than unsubs and had not previously borrowed anything for education. I realize that I am pretty fortunate to be in the under $60,000 club. Be very sure to read all of the fine print when you are borrowing and exhaust every source of scholarship money. Having over $250,000 of debt can seriously limit your future income.
Natalie
Wow, thanks to all of you for this wonderful information. I very much apreciate it all!!!
I shall get a credit report. Luckily we have good credit so that won’t be an issue. I was in the dark how they figured the EFC. My husband had a great salary up here in Northern Va, but won’t get anywhere near this amount in Blacksburg.
Thanks again to everyone for all the valuable info. I was really freaking out but have now come back down to earth.
Thanks,
Amy
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phew!!! thanks mary! i only have one credit card and i have learned from past debt nightmares that one is all i need!
melanie
That’s great (& congratulations)!
For everyone here: the general advise I’ve read is for EVERYONE is to check their credit report annually. (That’s any adult in the country). For anyone who’s going to take out educational loans, this is extremely important. Why? Because you can have done everything right, paid every bill on time, etc. and still have a mistake on your credit report. Maybe something that just isn’t up to date; maybe worse. Example: we checked our credit report before buying our house back in PA. On the credit report was an account with Sears. Get this: it was from years before we were married! My husband had paid it off but it still showed up as an active account in his name. (Yes, it’s a small error, but occasionally reports contain incorrect information that’s more serious). We got that corrected, but corrections take time. With FAFSA and loan apps, time is important. So getting as much as you can in order before FAFSA and loan apps will simplify the process.
(And remember to keep track of every piece of paper throughout the financial aid process)!
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Thanks for the info Dave. Did you, or anyone else that has posted on this thread, have a spouse that earned a moderate income? I am just wondering if this has an impact on the financial aid package. I have searched extensively on this, but this item seems very school specific, or maybe even individual specific.
Yes, my wife is a nurse & she was employed FT throughout medical school. That was one reason why our EFC was “high”. Once I became a resident & begin to carry FT benefits (health insurance & such), Wendy (Mrs. OMD) changed to per diem to afford us the luxury of her staying home w/ our 1 y/o little girl. She still has to work so that we can continue to live indoors & eat regularly, but that is the answer to an entirely different question…
Regarding “school specific” - yes & no. The Fed loan stuff, Stafford sub & un-sub, are run by the Feds & are essentially the same from school to school. For these loans, what does differ from school to school is the “annual cost of attendance” figure I mentioned earlier.
School funded/administered loans (these are simply one of the multiple types of private loans) eligibility requirements will differ from school to school. Some, if not most, of these will require you to not only submit your own complete financial info (from the FAFSA app); but also to provide the info from your parents, irrespective of your age or ‘independent’ status.
The sum total of loans you are eligible for is set by the FAFSA application. The Feds may, and very frequently do, determine that you are eligible to borrow in excess of the $38500 maximum through the Stafford program. At this point, you may seek private loans up to that pre-determined amount.
One ‘trick’ I learned when living on wife-support & student loans is that you are not compelled to take the full amount of loans you are eligible for. However, at any point in time during the subsequent year, you may visit the FA office & request all or part of what you did not take out initially. So, what I did was to finagle a target budget that would utilize less than my loan max knowing that if we got into trouble, I could always tap into my reserves. This way, we avoided capping out our loans every year, but still had the comfort of an emergency fund. Bear in mind that if you adopt this tactic that if end up needing money that it may take several weeks to get the cash; so you have to be thinking ahead.
ok, just so I have a full understanding here, let’s say your yearly calculated cost is 38K- does that mean they deduct your EFC from that amount and you’re responsible to pay the rest? I mean if you’re SO is making a moderate income, do they expect you to plunk down 10k/year in tuition, in spite of the fact you may not be able to due to bills?
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ok, just so I have a full understanding here, let’s say your yearly calculated cost is 38K- does that mean they deduct your EFC from that amount and you’re responsible to pay the rest? I mean if you’re SO is making a moderate income, do they expect you to plunk down 10k/year in tuition, in spite of the fact you may not be able to due to bills?
No. You can still get the $38,500 in unsubsidized loans each year regardless of your EFC. Your EFC is more for subsidized and institiutional grants/scholarships (or even sometimes institutional loans that have better terms than the federal Stafford loans…which at the current rate (2.8%) likely don’t exist right now).