Paying Bills While in Med School

[MrsRamen]

I am so excited - I have completed the pre-med curriculum, I've completed the MCAT and got an *okay score. I've sent out the primary application - and now I'm wondering.....

How am I going to pay for my car, vespa, credit cards, etc while I am in med school? (if I get in)

I've been struggling with part-time work and taking out loans, but my bills are $700 a month.....how will I pay them when I'm a full-time med student in the throes of memorizing every little thing in the human body.

Anyone who has done this? Any advice? What are you guys planning on doing?

(can't rely on the husband - i'm officially divorced after next month)

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[chocomorsel]

It's called loans sweetie. You take out student loans to pay off credit card loan, bank loans, mortgages if you have one, etc. Welcome to the wonderful life of a medical student.

 

[MJB]

I'm struggling with this as well. We will be able to live partially off my wife's income, but I'm not wanting to totally rely on her for living expenses...we have the cars paid off, but have a consolidation loan that might not be completely paid off if/when we sell the house....not to mention a mortgage.

I'm really hoping to maybe buy a duplex and rent out half and live in half and make the payment, or part of it, with the rent money, but not sure that will work.

With DO schools all being in the 35K range for tuition, I'm a little concerned. Especially considering we already have student loan payments, life insurance, investments, and other things we will need to continue to make payments to.

 

[laurafinn]

It's not fun - very stressful, in fact - but it's doable. Look at your school's COA (cost of attendance) - it determines how much student loan money you can borrow - and make sure there's enough room in there for day-to-day expenses plus your installment payments. Some schools have more generous allowances for living expenses than others. You can also check out Bank of America's Education Maximizer Loan, it allows you to borrow above your school's COA (I don't have experience with this particular loan, but others in the Financial Aid forum have mentioned it).

 

[Haemulon]

This will likely be the most difficult time/financial period of my life. Raising a family with no income (except my wife's) and very little time available while undertaking som eof the most rigorous and competitive training that one can undertake sounds like it will be next to impossible. But hey, it builds character and earns the respect of others. PLus, I love a good challenge. So bring it on!

 

[QofQuimica]

It's called loans sweetie. You take out student loans to pay off credit card loan, bank loans, mortgages if you have one, etc. Welcome to the wonderful life of a medical student.

I wouldn't count on being able to do this.

OP, you'd better get some serious financial counseling and quickly, because many medical schools will NOT allow you to take out extra money to pay off credit cards loans, car loans, and other non-education-related expenses. Loan money isn't infinite, and there are limits set by the schools and by the government as to how many low-interest loans you will be permitted to take out. If your credit is good, you can apply for as many private loans as you want. But you are really going to get your derierre kicked up one side and down the other when repayment time comes around if you go this route. My suggestion to you would be to pay off as much debt as possible before you start medical school. Work an extra job if you have to, but get those credit cards and vehicles in particular paid off. You might also consider selling one vehicle; do you really need both a car and a vespa? (Maybe you do; I'm just throwing the idea out there.)

In general, before you start school you should really think about how you can downsize your expenses as much as possible. There are things you really need, and things that you would like to have, but that aren't really necessary. For example, I elected to sell my pickup altogether before I started school. It is not as convenient to walk or take public transportation as it is to have my own vehicle, but it literally saves me several thousand dollars per year on gas, maintenance, registration, insurance, and parking expenses. I am going to go as long as possible (definitely this year and next) without buying a vehicle, and I am looking into whether I can get through my clinical rotations without one, too. (Not sure yet how feasible this will be). The point is, the sacrifices you make for medical school are not just in terms of time and hard work. It is a huge financial sacrifice too. I am sure every med student on this board will back me up here when I say that there are just certain luxuries you will have to forego so that you can afford to make it through school without drowning in debt for the rest of your life.

 

[Orthodoc40]

Q's right - you can't be certain those debts can roll into a loan. Many times they can NOT be. This caused me major panic when I found out a few years ago - I have a lot of credit card balances to pay off before August, when I start accumulating more debt for school! 2nd, 3rd job - that's my ugly plan before I start... Then what I can't get done before school starts, I will be paying by working some weekends during school, probably. I don't have a choice.

 

[mshheaddoc]

I agree in paying off as much as you can. Q has some great points!!

Depending on the cost of your school and living expenses will be how much you are budgeted. I know that most students realistically have a budget of about $1500/mn - give or take depending on where you live (if in a city) and if you have a family. You will have to skip on money but its not a bad if you just cut out the luxuries. We live on this while also juggling mounting credit card debt. It sucks but sometimes $20K a year isn't enough when you are establishing a family. But it can be done. Just no high ticket purchases, praying none of the appliances go bad or major home repairs, skimp on the heating and A/C bills, eat a little more ramen noodles . Its been an adjustment for me to go from making over $50K a year to less than $20K in living expenses but we are mananging. The first year was really tough but we are making it through a little easier the 2nd year (he's a med student, I'm full-time pre-med not getting income). Its all about budgeting.

And as for high ticket purchases (such as if you need a house or car or pay off debt) as long as you have good credit (650+ maybe even 620+ ) you shouldn't have any issues. But remember the amoutn of student loan debt WILL affect your credit rating. But I know many students who have had to get a car or pay off some debt, but they weren't buying lexuses or paying off $20K in debt. Its all about financial rational and logical money sense.

 

[AZCOMstudentdoc]

First of all, I am a DO student at AZCOM (you know the tuition) with a wife of 17 years and 2 boys (10 and 12). We moved 70 miles accross town so I could be closer to campus. My wife has fallen in love with our new neighborhood and feels that we are now building the new home of her dreams. We moved in August, so the boys could start school with the school year at the new school. We have yet to sell our old house, as it sits vacant (market slow-down ); and are renting a smaller place, 2 blocks away from the new place, while we wait for construction to be complete.

Let's talk financial pressures, yeeow

Hopefully, I can help some of those who have families.

I agree with Q...it is absolutely best to take a close look at family budget and see where cuts can be comfortably (or not) made.

Next, it is such a blessing to have a spouse who continues to bring in a salary and benefits. However, reasonable financial alternatives still do exist, even without a spouse, or without a spouse who can support the family for at least 4 years.

I had been considering the HPSP through the military for years, and only at the last minute decided not to do it (for family / personal reasons). Financially, it is a smokin' hot deal. The service to your country is a plus. Overall, it is worth consideration. They currently pay ther students around $1400 per month (in March I think they are increasing that by $1000 or so) while in school. They pay all tuition, books and supplies, lock-stock-and-barrel. You have access to some of the best residencies around, and get paid around $70,000 while doing them. The catch is you owe 1 year of active duty service for each year in the program, not counting residency.

I actually opted for a state program that awards a scholarship (actually a forgivable loan) to residents (5 years miniumum) of $17,000 a year, which covers my books, supplies and own personal expenses (gas, car insurance, lunches, clothing, etc). My wife's salary and benefits covers the rest of our family's expenses...including the insane mortgage + rent we are currently paying

Worst case scenario, if I leave Arizona and chose not to practice medicine here, I owe the state 1/2 of the money the gave at 8% interest, no penalties. Check with your state. There might be similar programs out there (some are probably more stringent on service requirements than others, but options do exist)

Of course, that does not cover tuition, which we decided to cover with student loans. So, if we stay in AZ, I will graduate with around $140,000 debt.

Not ideal but manageable...we think.

 

[Non-TradTulsa]

Wow, I haven't been on SDN in months - now that I'm an MS-1 and not an applicant, but it's great to see QofQ's common-sense wisdom once again!!

MrsRamen, I understand your predicament - as non-traditionals, we have all had an adult financial life - we're not flat-broke college kids going into medical school. However, you can't go into medical school expecting to keep the same financial structure that you had as a grown-up - it just won't work that way. If you have a decent credit rating, you can indeed borrow money privately that is over-and-above what the school will allow you for your certified cost-of-attendance - but consider what that means. It means that you'll be deferring non-secured credit card debt for all the years that you're in school/residency - and you'll end up paying $2 or $3 or more for every dollar of credit card debt or car debt that you owe now. Not a smart financial strategy (take it from me - I'm a CPA-turning-doctor, which is weird).

Unlike some non-traditionals, I didn't sell everything I own - I actually kept my house and put it on an interest-only note to keep the expense down while I was in medical school (interest-only notes are risky to me, but there's no point in paying off deductible mortgage principal debt with non-deductible student loan debt that carries a higher interest rate). But I did pay off my car and several thousand dollars in credit card debt - which was tough, because the Kaplan course, school tuition, books, application fees - all that jazz put my credit cards through the roof - but you MUST find a way to pay those debts off - sell the Vespa, sell the car and get something you can pay cash for, whatever - even a generous school is going to give you only around $2,000 a month to live on, and $700 in debt payments just won't fly.

After a very successful career as a CPA in a hospital, it's not easy for me to drive a paid-off car with 100K miles. It's not fun to give up restaurants that I used to patronise all the time. I hate not buying new clothes as I used to. I even watch the thermostat to keep the utility bills down. What worries me is that you sound as if you haven't accepted the fact that your financial life is going to change quite a bit in medical school.

But, not to worry - my experience has been that you really won't have time to notice your changed financial circumstances, because you don't have time to shop for anything except groceries!!! Seriously, though, if I can give you any specific financial advice, I'm happy to do so - that's what we're here for.

 

[laurafinn]

many medical schools will NOT allow you to take out extra money to pay off credit cards loans, car loans, and other non-education-related expenses. Loan money isn't infinite.

Totally true - if you're paying off debts, you need to cut your expenses to the bone, because you'll be living on even less money than other students. And that loan check only comes a couple of times a year. After being employed full-time, having money flowing in and out at regular intervals, it's hard to adjust. My car is 11 years old, paid for outright, and when it broke down, it sat in the driveway and I walked everywhere until my next loan check came in.

I haven't always made the most rational decisions about money, but it ended up better financially for me to take the plunge and start school (after deferring a year so I could vest in my employer's pension plan), even with some debt hanging over my head.

$700/month is a lot though. Do everything you can to bring that number down before you matriculate.

 

[chocomorsel]

I didn't mean taking out EXTRA loans. Just meant living off whatever your school alloted you to pay off monthly expenses. I forget that Texas has some of the cheapest schools so I'm blessed. And my credit card loans were minimal/non existent before medical school. I had a full time job, and paid them off. Anyway, I don't know what to tell you if what your school allots you isn't enough to pay off your bills monthly. Q's advise, good sense.

 

[neurodoc]

I am so excited - I have completed the pre-med curriculum, I've completed the MCAT and got an *okay score. I've sent out the primary application - and now I'm wondering.....

How am I going to pay for my car, vespa, credit cards, etc while I am in med school? (if I get in)...

Well, your first job is to GET ACCEPTED to a medical school. Until you do that, you're just a college graduate with a lot of debt. You may or may not have the ability to earn the bucks to pay back your loans (depends on your major, I guess). Once accepted to med school, you can apply for more loans, and agree to taking on more debt based on your potential earning ability as a physician.

My understanding is that as a med student, most lenders will view you as a worthwhile lending risk, and you can borrow up the kazoo if you want to do that.

That being said, I'd advize against going into "unecessary" debt. Live within your means and eschew borrowing for anything you don't really need. Credit card debt is bad debt. Who the Hell needs a Vespa? Use a bicycle, take public transport, or walk...

 

[njbmd]

MMoving to Finace where financial matters are discussed.