I’ve got good news and bad news. The bad news is that the cost of higher-level education, including college and medical school, is becoming more expensive. The good news is that this video will cover everything you need to know to better manage those pain-in-the-butt student loans. I’ll show you the strategies I used to save hundreds of thousands of dollars myself.
What are Student Loans?
- They must be used for education and associated living expenses
- Their rates are pretty bad, usually 5-10% interest
- They are discharged only in the event of death or total disability, but not bankruptcy
There are two main categories of student loans: Federal Loans (also called Direct Loans) and Private Loans. Federal Loans are almost always better, as they have lower interest rates and come with special income-based payment and forgiveness plans, which we’ll get to shortly. For that reason, always max out your federal loans prior to turning to private loans. Generally speaking, Caribbean medical schools do not qualify for federal loans, except for those with higher match rates, such as AUC, Saba, and St. Georges.
Student Loans in College/Undergrad
The compounding effect works wonders for you in investing, but it also works against you when it comes to student loans. Therefore, minimizing loan burden as soon as possible as a college student is advised. *Note that I’m not a tax or financial professional, so seek out professional advice prior to acting on any of the information presented here.*
Many students feel pressured to go to expensive private institutions when a highly ranked public university would provide nearly all the same benefits at far lower cost. I personally went to UCLA, and by doing well there, I was able to get into a top medical school with a full-tuition scholarship which saved me hundreds of thousands of dollars. I speak more about the importance of college prestige and how to make the decision in this post.
Be sure to check for scholarship and grant opportunities at the colleges you’re accepted to. This shouldn’t be the only factor but should be an important part of your decision when deciding between multiple undergraduate institutions.
2 | Work-Study or Part-Time Job
I also recommend doing work-study to help pay for tuition. I personally found a job in a research lab, so not only was I making money to help pay for school, but I also was strengthening my medical school application by generating publications on colon cancer in mice models of inflammatory bowel disease. Talk about killing two birds with one stone. Those publications didn’t just help me get into medical school but also helped pad my publication list when applying to competitive residency programs.
3 | Minimize Living Expenses
College is a time to be frugal, but not painfully so. Have roommates you can treat yourself to your own place later on after graduating. If you’re really hardcore, live at home, but I personally feel a big part of development in college is learning to be independent. Learn to cook, so you aren’t always eating out, which is not only more expensive, but also less healthy. Buy used books rather than new, and sell them when you’re done. Don’t feel the need to upgrade to the latest tech every single year.
4 | Be Intelligent with Loan Options
Again, be smart with how you borrow money. Only borrow what you need, since you’re paying interest on the money you take out. Opt for subsidized loans when possible, as they reduce or eliminate the amount of interest that accrues while you’re still in school. And that’s a pretty big deal.
