Pay for child's med school or invest money?

[pmb]

@righteoustales My wife is graduating from medical school this May. The loans are federal but their kid should 100% look into a Public Service Loan Forgiveness program after school. They'll have it all forgiven after 10 years if they follow the track

 

[rooh6626]

@applesandangels Lots of options that each have their pros and cons. Can only add - Whatever you do, neither of you should take out private student loans

Federal are always better as there are features like income-based repayment, loan forgiveness, and deferment that simply do not exist for private loans

 

[resjudicata]

@rooh6626 federal loans only pay so much you don't have a choice. This guy can afford to help, i was on my own i had to take out private loans.

 

[fuchsia]

@resjudicata Grad plus loans don’t have a cap, so there’s no reason to opt for private loans for graduate school.

That’s especially true for med school, where you need the income based plans during residency. If you take private loans, there’s basically no way to make the payments during the 3-6 years you’re only paid a pittance.

 

[rooh6626]

@resjudicata Ah yeah can definitely happen based on their FAFSA offerings. In my experience, Parent PLUS Loans were the majority of my college loans. I’m paying them though

 

[enealexandru]

@applesandangels As a physician, there are a dozen ways to have your loans forgiven if you’re in lower paying specialty and anyone in a higher paying specialty can easily repay their loans. It’s also a good practice in learning to live within your means as a med student. Invest that money elsewhere and help your child later on if they need it.

 

[zaikahlee]

@enealexandru Also dare I say, the debt isn’t AS horrible as most would make you believe. It’s definetly bad, but a lot of doctors simply continue to live off ~60k a year after residency and become debt free within a few years. Otherwise you’ll still take home WELL over 100k after taxes (and after yearly loan payments) a year if you go the more traditional route

 

[fade]

@applesandangels Have them take out a loan and help when you can. They have a longer runway for retirement than I assume you do.

 

[justiniun]

@applesandangels If you're set for your own retirement then sure, spend money on your kids education. If not, then hell no.

I feel that kids should learn to manage things by themselves when they are adults. It just gives them a better perspective on life, and being able to deal with things when their parents are no longer around.

Your kid is in med school, so you did a fantastic job raising them up. However, he still needs to learn the value of money, and working to earn his own way on life, dealing with things by himself. Managing debt, paying it off, etc etc. I don't reccomend just paying for his education, he should pay for that on his own.

 

[richardjuarez1234]

@applesandangels I would invest it. Really you have 7-8 years to decide. Paying for the first year of school now wouldn’t make sense. Setting the money aside and investing it immediately and paying it off after residency makes more sense (7-8 years from now). While in school and residency the loan would be deferred. Use that deferral time to your advantage. In fact you could put the 100k in the stock market. Then hand over the account to your kid in 7-8 years and let them do what they want. Pay off their first year or something else. Or you could keep your 100k and give the returns over the 7-8 years on that 100k to your kid whatever it ends up being. It has potential of doubling by that time. Good luck

 

[leahhope]

@applesandangels Is your question more of a personal question than a financial question? Honestly I think only you can answer your own question than let Reddit users answer for you.

 

[cssml]

@applesandangels (from Quebec-prices and schooling is different here) So I am a GP. Finished high school. Did 2 years of college health science. Then 4 years of university and got my bachelor degree in psychology and started my phd to become a psychologist. Switch to med school. Had my daughter somewhere in there. Finished at 30. Had 400k in student debt. Still paying those off. My number one priority in life is that my daughter finishes school with 0 debt. It’s so sufficating!!! She is 10 soon. Already have money set aside. We make sure that she knows the value of money and anything she gets she has to put 1/2 in a savings account. There are other ways to show them to menage money without letting them get really anxious about school debt!

 

[anewbeginning]

@applesandangels Tough one. Technically you can "afford it" but I think it would be better for your child to pay for the school themselves via loans. What sort of doctor do they want to be? How committed are they?

Some doctors can pay off a $400k loan easily, but some doctors don't make tons and tons and will be paying that off for a while.

I think you should focus on your own retirement and situation. Down the road, if your child needs help paying down the loans you can help them then.

 

[smyrna7]

@applesandangels Do not cosign loans for your childs education. When they graduate you can help them pay for loans if you have the money. If you had a couple million in the bank and this is your only child you should help him. My kids are going to a college in a different town. Tuition was only $15K a year for each, but I bought a house in the city for them to live and are paying utilities.

Just make sure taking care of your kids doesnt break you financially.

 

[resjudicata]

@applesandangels Your kid will make more than enough money to pay off whatever debt they accrue from going to med school. It might be better to continue investing for yourself.

 

[52turkey]

@applesandangels 100% of MDs I’ve met take out student loans.

 

[resjudicata]

@applesandangels I’d probably house them for free but wouldn’t pay the $100ks for school.

 

[tobigat]

@applesandangels Assuming you are in the US here As long as your kid doesn’t have any problems with their credit they’ll get federal GradPlus loans up to full cost of attendance. They will be fine paying those off as well. If you’re wanting to help I’d say invest it and set aside profits and give it to them at medical school graduation as a present before entry to residency. They will appreciate it far more as residents are underpaid and overworked. It also means they can relocate to their program without having to take a predatory relocation loan

 

[mallowpop]

@applesandangels As a parent, don’t pay for med school. Your child can and should be responsible for the cost of med school.

 

[richardnm]

@applesandangels Did your child look for grants and scholarships like it was his/her/their full time job and their life depended on it?