Tuition payed for, living expenses still up in the air.

[Konnan101]

Hey, so I am fortunate enough to have just gotten accepted into medical school and to have parents that not only can afford to pay the tuition, but are willing to do so...college was basically free because of scholarships...This however, does not mean that my living expenses during medical school are covered, and I'm left wondering how I am going to pay for rent, food, etc...without having a full time job. If tuition is payed in full on my parent's end, will I still be able to borrow money through a Stafford loan, or some similar education loan, that will be low interest and won't require payments until after graduation, or will I have to seek private loans, or will I not be able to take out an education loan at all?

I would work out a deal with my parent's, were I get tuition payed for through loans, and they just give me the money, but as I understand it, I cannot be given more than $11,000 annually before gift tax is applied, and I understand that to be a pretty serious tax, and I'd rather avoid that if possible....I think I need a bit more than 11,000 to live off of a year.

so here are a few questions:

Can I even do this?
Do I need to fill out a FAFSA for this?
What is the maximum I can borrow?
Will this be through private loans only?
Will I have to piece together a few separate loans to make this work or can I take out just one loan?

Sorry if these are obvious questions...I'm pretty new to the whole borrowing money for school thing. I do have pretty good credit though and hope this will help out in borrowing money for school.

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[dpmd]

Fill out a FAFSA.

Your school will put together a financial aid package based on this. I would guess you won't get any need based aid, but you don't need it anyway. It will likely have just Stafford loans up to your EFC (which will probably be not much since you will be independent and it sounds like you don't work). You then have a few choices:

1. Take out the bare minimum you need to survive, with your parents paying tuition, fees, etc.

2. Take out a comfortable living amount (You parents still pay tuition and fees and such, but you ask for the full amount of living expenses the school budgets plus maybe a little more in loans). Live better, or just have a nice cushion. If you end up with way more than you need you can actually cancel some of your loan the next semester.

3. Take out everything you qualify for (whatever is left over after your parents pay will just be refunded to you). Now you have a lot extra which you can use on something practical (like a car if you need one and don't have one yet, a down payment on a house if that works out for your situation-for most people it won't), or impractical (a bunch of coke, hookers, trying to beat the stock market in the next four years). Unless you manage to make a bunch of money on the extra you take out, you will still be on the hook for repayment-but you won't be any worse off than the rest of your classmates.


I had a husband that worked and a partial scholarship. This is how I found out that you can take out more money than is owed to the school and get a big check. In my case we did it once to get money to buy a condo that was an hour closer to school for less than what we were paying in rent (since I could rely on my husband paying the mortgage, and I correctly predicted we would be able to rent it out after I finished school for at least as much as our monthly expenses for it). My brother did it once and played the stock market (this was a long time ago and I think he made enough money for it to at least not be a loss). I wouldn't recommend it unless you are risk tolerant. Option 2 seems like a good one unless you really want to minimize your loans (which actually would probably work out since your parents would probably help you out if you had a situation pop up-or you could take out more stafford loans later in the semester if the need arises).

Hope this makes sense.

 

[Konnan101]

excellent, thank you for the info. I actually am currently working full time as an emt, and will be until school starts. I just don't plan on working much, if at all, once school starts. The fact that I am working full time right now shouldn't change anything above, right?

just to make sure I have this straight...whatever my maximum student loan amount is (Stafford is around 40k I think) I am still able to borrow all of it, regardless of whether my tuition is payed for or not, it's just that the part of the loan set aside for tuition will not be given to me until my parent's actually pay the tuition and all the fees, and then it will come to me as a refund check. so basically I can still borrow the full amount if I wanted too it just would all eventually make it to my bank account instead of some of it being used for tuition. let me know if I got that straight.

and also regardless of what I do, the first step is to fill out a fafsa correct?

thank you for the help

 

[dpmd]

The fact that you work will mean your EFC (estimated family contribution) will be more than 0, but that is ok. That will just affect your need based aid.

First step is FAFSA regardless.

You will be allowed to borrow up to your school's cost of attendance (which will include things like room and board-based on average costs for your area, as well as books, a computer if they require one, tuition, fees, health insurance). If your parents then send in a check, you would get a refund. At least that is how it worked out at my school. Maybe your school would send some of the loan funds back without asking you if that happened. You would still at least get a refund for room and board, books, and whatever expenses they budget that aren't paid to the school.