My first student loan payment posted today!
I was able to get through my pharmacy program with primarily only getting subsidized loans, however, the first semester of my first year we elected to take the unsubsidized ones too. To cover the tuition bills DH and I had been setting aside $350 a month, well after my last tuition payment in January, I continued to do this. So today I took all of that and made a payment of $1400.
I start my residency today which is good in several respects. First, I'm really excited for it and it will be a great experience. Second, I'll get a paycheck! Finally, huh? I plan on putting nearly 2/3rds of my paycheck to student loans, and maybe more, but we've got some other saving we may do. Third, I can put my loans in deferment and extend the length of time my unsubsidized loans remain interest free. When I put my loans in deferment I'm going to ask if I get another grace period or if payment starts right after I finish my residency. Anyone know?
I plan on at least paying off the interest that has already accumulated and then the 8K in unsubsidized loans. Then I'll keep making the payment, but pay it to my savings account (earning 1%) until my subsidized loans start earning interest. Then, hopefully by then I can just pay it off in one fell swoop.
Viewing the 'school' Category
My first student loan payment posted today!
Itís about that time of year againÖstudent loan time, that is. I am starting my second year in pharmacy school and Iím still pretty new to dealing with student loans. Between my scholarship and parents, I escaped my 5 years of undergraduate work without any student loans. Pharmacy school, however, is a different situation. The estimate for school and living expenses is nearly $27,000. There is no way that DH and I could really swing that.
Going into my first term my financial future was a little shaky. We found out the day of orientation that DH would be moving to MaineÖfar away from me and school in Florida. Not knowing how that would affect our finances I took the entire amount of loans offered to me: $12,600. Tuition was taken out automatically and the rest, nearly 6k, continues to sit in my savings account untouched. Second semester my in-laws graciously offered to pay tuition. We accepted their money, but also accepted the subsidized loan. Maybe not everyone would agree with this move, but the way we figured is that government was giving us an interest free loan on that money for another 3 years or so. It also enabled us to max out our Roth IRA accounts for the year.
That brings us to this term. DH and I have now spent a year learning to juggle two households. Iím moving in with a roommate so some finances are still up in the air; I predict that my finances will be about the same, and maybe even a little lower than they were last year. So I once again only accepted the subsidized loan of $4250. I donít know the exact cost of tuition, but I anticipate it will pay for just over half of it for the semester. The remaining 3000 or so will come from that 6000 from first semester last year. Ideally, that 6000 will cover the gap between the subsidized loan and tuition costs for both this semester and next semester, but weíll have to see.
Assuming DH and I are able to finish up the rest of pharmacy school only taking out the subsidized loan I will have taken out $42,300. I just dug up my last statement on those student loans and it looks like I have been charged $480 in interest during the past year. So add another thousand or so for interest, and I anticipate the loan balance will be about $43,500. Itís a little scary to see that debt load. Even when DH and I had two car loans, we never had more than $25,000.
Hereís the good news. By only taking out subsidized loans we are actually saving A LOT in potential interest charges. Nearly 500 a year in interest is a lot, but itís a lot better than it would be if we took out the maximum possible. Also, I anticipate that DH and I may have some extra money which can be used to pay off the interest charged, and maybe even pay down the balance some before I graduate. Although, even if we donít get the money, or chose to do that, my total student loan debt will be less than 1 yearís salary. We plan to continue living off of DHís salary so my income can go toward student loan debt, house down payment or mortgage, retirement, and whatever else comes our way.
In the three weeks since school has started I've been feeling so overwhelmed and have not had time for anything other than studying!! Having my in-laws in town this weekend and last haven't helped either since that means I've had to cram all school stuff during the week.
Anyway, I've had zero time for things that I have previously enjoyed like couponing and tracking our finances. Thankfully there haven't been too many good deals out there otherwise I'd either have to miss out or try to cram it in. Our finances are sort of working out as expected, but I'm not able to track and monitor it as much as I'd like.
School is also much more expensive than I was expecting. I was expecting for tuition and stuff, but now there are various club dues and eating out! I'm planning on joining a couple of different clubs and with dues being about $50, that quickly adds up to $100-150.
Grabbing lunch at the hospital is about $3, but if we go somewhere else it will easily add up quickly. Our schedule is so varied that some days we will have to eat at the hospital, and I can probably take my lunch most of those days. However other days it makes more sense for people to go out to lunch, and it would be harder to bring my lunch those days. Especially this semester when I'm trying to meet people and build relationships I'll probably go out to eat more than in future terms. We'll see though!
Argh, school loans are so hard. Actually the loans itself isn't difficult, it's just that my personal situation that is making it so complicated.
I currently have accepted all the loans they will give me. (For the year: $8,500 subsidized, $16,700 unsub.) As of this moment DH and I have a "profit" of roughly 1,000 a month, which we have been using to pay off our cars and put towards our Roths. If life were simple this would mean that we would only need to take out $12,000 worth of loans each year to cover tuition.
However, life isn't that simple for us. Starting in November DH will be moving. So we will suddenly have two sets of rent and utilities to pay for. I will be downsizing to a smaller apartment to save money, but our finances will still change. Exactly how much, we don't know. And from prior experience it will be a couple of months after the move before things settle down and we can get an accurate picture of our spending habits.
To give you some more background the student loan will be at 6.8%, my car loan is at 5.99% and DH's car loan is at 3.59%. We currently have a decent amount of money in cash (earning 5.0%) between our EF and down payment funds. In theory we could pay for a year of school flat out--but then we'd be broke.
With so much up in the air this is what I'm thinking:
*Take all of the student loans they'll give me for Fall term.
*Pay off the interest each month.
*After paying tuition any extra money will be put in our savings account (5%).
*Try to have us only live off of DH's paycheck and not touch the loan money.
*Adjust and see if less money can be taken out for Spring term.
From there things get a little more murky.
*Should we continue to put our monthly "profit" towards our cars and retirement?
*Should that money instead be diverted towards the student loan?
*Should I even hold onto that extra loan money or should we use our EF/Down payment money to cover any potential gap?
Any insight or opinions would be greatly appreciated. I'm a little surprised I'm having a hard time with this. I think it's because the completely fiscally responsible thing (avoid all debt like the plague and pay it off ASAP) is in conflict with the plans we had (pay off the cars early, save for retirement, and take out loans for school expenses).
I am applying to pharmacy school this year and I got my first acceptance letter!! Yay!
Now comes the hard part. That school wants a $750 non-refundable deposit to hold my spot. Normally this wouldn't be a problem but I have no idea if I'm going to be able to go to their school.
My husband is in the Navy and there are currently 4 places (all corners of the US) that he could be stationed. We won't know which one it will be for a couple of months. On top of that he'd be stationed in Maine and the school is in New Hampshire so we wouldn't be able to live together anyway...but we'd be 1-2 hours away.
I'm leaning towards just paying the deposit as a safety net, cause I'd hate to end up in Maine and not going to pharmacy school. (I will be receiving $10K from my father's life insurance policy that I'm putting toward school, so the actual amount of the deposit isn't much of a problem).
My acceptance to this school does bode well for my acceptance to the Florida school. That is really our first choice, for him to get stationed here in Florida and me go to school here. This would mean no moving (yay) and we get to actually live together (double yay)!! Now we just hope that the Navy and the pharmacy school gods all agree that we stay here in Florida.