Finding the right balance between loans and personal savings + other advice

[bonoz]

Situation:

US Citizen and I'll be studying medicine in the UK for the next 4 years. The tuition I pay is about the same as US medical schools (maybe just a bit more). The school sent me a cost of attendance calculator for the first year. It includes first year tuition + fees. They use a very liberal exchange rate and use liberal estimates. With that, it comes up to be a tuition of $44k + $20k for living expenses. I have personal savings of about $50k. I saved this up through years of working.
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I am eligible for:

Stafford - Subsidized: $8500
Stafford - Unsubsidized: $12000
PLUS Loans that go up to the remainder of my Cost of Attendance.

My tuition is $44,625 for the first year.
My anticipated living expenses are around $20000/year.

I have personal savings of about $50k and some support from parents.
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Question:

Should I FULLY rely completely on Stafford (subsidized + unsubsidized loans) and direct PLUS loans? Or should I use a portion of my loans and use my personal cash for the rest? I need some help finding the balance between loans and personal cash. This is bearing in mind that this is just for the first year. I will have three more years after this one. I don't anticipate too much of an increase in my personal savings during this time. So I pretty much have to ration my savings for the 4 years. I need some ideas on how to ration all these different options. Initially, I thought I'd do the loans for just the tuition and use my personal savings for living expenses throughout the 4 years. Then I thought, why rely so much on the loans? the interest will eat me alive? But then I realized that I'd run out of my own money in the first year and I'd end up relying on loans anyways if I were to use my $50k for first year tuition.

It's a confusing mess. Not sure how to allocate my funds. How much should I borrow and how much of my personal savings should I use? The goal is to get the best deal out of this so I end up spending the least amount of money in the long-run.
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Also, please feel free to give me ANY advice/comments/suggestions/heads-up/etc.

Please advise. I appreciate the help.
Thanks

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[bonoz]

Need advice with this!

 

[7 Iron]

I would accept the subsidized loan and the Unsub Stafford loan for this year. (Next year subsidized loans will no longer be given to professional or grad students.) Then I would use your personal savings to avoid taking out the GradPLUS loan for as long as possible, as its interest rate is horrible.

Because you don't have enough cash to cover living expenses for all 4 years, you will have to rely on loans no matter when you spend your savings, whether it's during the first ~2 years or spread out over all 4 years. The best way in my opinion is to use your cash mostly upfront, so that way if/when you take the GradPLUS, you reduce the amount of time that you have that loan outstanding. Less time=less interest paid.

By the way I would not use ALL of the 50k. It's important to have some cash in savings for emergency situations. Maybe 5-10k depending on your needs and comfort level.

 

[bonoz]

I would accept the subsidized loan and the Unsub Stafford loan for this year. (Next year subsidized loans will no longer be given to professional or grad students.) Then I would use your personal savings to avoid taking out the GradPLUS loan for as long as possible, as its interest rate is horrible.

Because you don't have enough cash to cover living expenses for all 4 years, you will have to rely on loans no matter when you spend your savings, whether it's during the first ~2 years or spread out over all 4 years. The best way in my opinion is to use your cash mostly upfront, so that way if/when you take the GradPLUS, you reduce the amount of time that you have that loan outstanding. Less time=less interest paid.

By the way I would not use ALL of the 50k. It's important to have some cash in savings for emergency situations. Maybe 5-10k depending on your needs and comfort level.

Thank you so much! This clears things up for me.

 

[emilykrys]

One thing that you'll want to consider is weather you'll be able to find a job soon after you graduate. One mistake that I made is I figured I was going to just wait until I got a job after graduating and now that the economy has gotten worse I haven't had any choice but to defer the loans so a word of advice is if you choose not to start paying it off until your finished I would still find some kind of job just so you can start paying it off as soon as the statements come because it like kicked in shortly after I graduated and it was like 250 dollars a month and I missed the statement and they charged me like a 500 dollar late fee it was a nightmare sallemae loans are evil.

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Ragnarok

 

[bonoz]

One thing that you'll want to consider is weather you'll be able to find a job soon after you graduate. One mistake that I made is I figured I was going to just wait until I got a job after graduating and now that the economy has gotten worse I haven't had any choice but to defer the loans so a word of advice is if you choose not to start paying it off until your finished I would still find some kind of job just so you can start paying it off as soon as the statements come because it like kicked in shortly after I graduated and it was like 250 dollars a month and I missed the statement and they charged me like a 500 dollar late fee it was a nightmare sallemae loans are evil.

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Ragnarok

People on some other forums have told me that I shouldn't touch my personal savings and just keep them for emergencies and for after I graduate. Because I wouldn't want to graduate, have close to $0 personal savings, and not have a job and be totally screwed.

 

[TMP-SMX]

You have a 6 month grace period before loans are in repayment. You should have a cushion of credit cards to make most payments in the meantime. Once you are done with medical school I assume you should have a job afterward (residency)? As said before keep some of your savings for emergencies but spend a lot of it.

You seem to be choosing an expensive route to medicine. Are you planning on staying in the UK to practice?