As IBD Analyst, Will I be able to pay my sister for med school? HELP!
Ok so I accepted a SA offer for 2011 at a BB in NYC. Ideally I will start full-time in 2012 for my IBD stint, which is when my sister graduates from college. That leads to the main problem
My family is actually quite poor and was unable to afford my sister to go to optometry school. She knows she will get accepted to the program but the cost is about 250 000 (including living etc) over 4 years. My parents are discouraging her from doing this and are convincing her to do something else. They refuse to help her take out any loan.
I told my sister not to worry and that I can use my IBD job (once I graduate) to take out a loan and support her school expenses. Everyone around me, including my gf think I am crazy. They are telling me I am being impulsive and that I am not putting numbers into context.
Now, my question to you is this: Would it be realistic for me to take the extra loan (on top of the fact that I have to pay my parents 1000-2000/month when I start working)? Am I being crazy to not let my sister give up school?
UPDATE: My sister CAN NOT take out a loan herself. Reason: the optometry school is in the US and we are not Americans. Our local banks or federal government will not lend us money for schooling abroad given that we do not have proof of sufficient income levels. She can only get a loan if she is going to school in her own country (and that is not going to be an option).
Know people who joined the Air Force to get a medical degree for free. Well, not exactly free, but you give them time, they give you your degree. What is Optometry btw?
Yeah well that is not an option for us right now.
Wiki optometry lol
I don't think you'll be able to work that unfortunately.. Not only will you most likely have no credit rating when you apply for the loans, but financially I don't see it working out when you take into account the cost of living in NYC on top of you paying your parents monthly.. The army reserve or air force as mentioned before wouldn't be a bad bet. Tell your sister shes gonna have to suck it up for a few years it's worth it for a med degree
If the rule of thumb is not to spend more than 1/3 your take-home pay per month on housing, with a base of $70k you're probably looking at $4,500 monthly, so $1,500 on housing tops. If you're also forced to repay your parents $1-2,000 a month, you can already see you barely have anything left, and you haven't even begun to factor in food, transportation, or any other daily expenses. Add that to the fact that you won't have sufficient credit to get loans of that scale, or if you do it would be under very unfavorable terms . . . I don't think anyone here would advise you to pursue that.
I am surprised that you didn't even think about not repaying your parents. I mean if you pay for your sister's fees, they should understand why you can't repay them. But even in this case, that is still a lot of money, and very dangerous because you could be laid off after one year in IBD, or even not get a return offer after your internship...
FIRST: NEVER EVER EVER listen to a girlfriend. EVER. i have seen many men fuck their shit up because of woman.
can you audit med school classes? if you can, she could work FT for a year whilst auditing classes and the two of you might be able to scrape together some sort of savings.
it would suck serious ass if she started med school and didn't like it.
you can't afford a 250k loan in addition to living in nyc. very bad idea and you should not try to do this.
Not to be the smart ass, but optometry school is not medical school. Of course, that doesn't make a difference in your dilemma but you should at least know (if your sister did not already tell you), that optometrists do not go to medical school. Ophthalmologists go to medical school and then enter an ophthalmology residence after.
That being said, what is stopping your sister from taking out loans to afford her education? Your sister will be able to take out federal loans to support a portion of her education. If she requires more, then she can take out an alternative (private) loan to bridge the gap.
You can save money in your career and help her pay down her loan if she is so worried, but I don't see any point in taking out loans in your name, since any loan you can take out (most things being equal) will probably be at an higher interest rate than the educational loans available to your sister.
Stupid idea, someone else already pointed out how the math just doesnt work. 1-2k per month pay back to your parents is also extremely high, you will see that living in a big city you rack up expenses very quickly.
Also, you only have a SA offer, you are a long way away from being an analyst and this kind of thing should not be counted by you or your sister.
You know your sister can take out the loans right?
My brother is in medical school and when he is done he will have about 240K in student loans. The government will loan your sister the money (as well as some private loans to pay for the rest).
Optometry is not med school. If money is a problem, make sure she studies something that leads to a high-paying job.
Yeah, that would crush you for a VERY long time.
Also you have to consider the long-term opportunity cost of that decision, ie:
Play with a compounding interest calculator and see what that 200k would be worth in 20 years if you invested it at 8% or something instead of paying the loan.
10 years: $431,785.00 20 years: $932,191.43 30 years: $2,012,531.38 40 years: $4,344,904.30
Whenever someone our age thinks about large amounts of money (ie student loans), they consistently fail to observe the power of compounding interest. Opportunity cost of anything at this age is massive.
I know you want to help your sister and your family at the same time, but it's just not possible with an analyst salary. The military would be a great way for her to become an Optometrist, but she will have to give up 3-4yrs of her time to the military in return.
shut up with this military stuff
Hey guys, I used to be pre-med so I should chime in here. Military is NOT a good way at all to go into medicine for cheap. Sure the 4 years of medical school are cheap, but then you have to spend at least that amount of time serving the military for very low wages after you finish your long ass residency. I've heard terrible things about medical facilities in military settings being horribly understaffed and not a pleasant place to work.
Optometry school is of course not medical school, and most medical students take out massive loans to pay for their dreams. It's a given that no one's going to pay for them. Maybe this isn't the case for optometry school? But it's a tough decision you have. What are the tax rules regarding you using your money to help support your sister? $135k minus taxes for $95k (say tuition is ~$40k, tax on $95k is about $35k) is a lot bigger than $135k minus taxes for $135k (tax on $135k will be around $55k).
Thank you
updated !
Well, then. If you are comfortable having this discussion with your sister, then tell her she will have to delay her dreams. She needs to first get a job and start to show a trend of income (for credit reason) and hopefully, you also have an IBD career and do the same. A few years of work experience, some discretionary funds saved, and good credit on both your parts, she can attend optometry school by taking by taking out private loans and you can act as her co-signer.
She should also consider going to either a lower cost Optometry school or even state Pharmacy school. I am sure you might have already crunched the numbers, but $250K is over $3K in loan payment (or $3K/.68 = $4.4K of pre tax earnings) for 10 years. Even in high cost cities, in Retail she will make about $110K with annual raise of few percentages (assuming she gets a decent job right away). That'll leave her with $55K of pre-tax income to spend on everything else in areas like NY/DC until she pays back the loans. If she also wants to help out your family, it will only be more difficult.
Had the same discussion with a friend who recently graduated from Optometry, making enough, but struggling with payments on $110K of loans.
first i say you ditch your gf.
and fuck repaying your parents, obviously they don't care about your sisters dreams. they will live.
try relocating to a different state after graduation. nyc tax and cost of living is a bitch....you will be able to save A LOT more.
tell your sister to get a part-time job asap and during opt school to atleast cover living expenses for the 4years. then you will be looking at
I'm an optometrist so hope these help: 1. To become an optometrist, your sister needs to attend an optometry school - not medical school - I think she already knows this. 2. Military scholarship and US federal aids for educational expenses are not available to her because she's not a US citizen - I think you already know this. 3. You should not take on $250K loan because unless you make 100K+ annual salary, you won't be able to send that much money to your parents, pay for your living expenses in NY and pay for your sister's educational loan at the same time. What your sister can do to help herself: 1. Come to the US under your sponsorship and get a green card. 2. Live & work in the US for a couple years to get her citizenship. I'd recommend working as a technician/receptionist for optometry offices to gain experience for herself and to score point for optometry school application. 3. Once she's a US citizens, she can get all kind of federal financial aid for her optometry school plan. It'll never be too late to pursue her dream - most optometry students are in their mid to late 20s. Some of my classmates are in their 40s.
Warning: 1. Optometry schools don't just take anyone. It's actually quite competitive - your sister should read the requirements for optometry schools on their websites (90% of applicants will have a BS degree in Biology or related majors and have taken all the prerequisite courses). 2. Optometry school is quite intensive - 30% of my class dropped out/repeat after first year because they could not handle the workload (36-40units/semester) and/or pass all their exams. 3. Aside from passing all of their examinations in optometry school to get their diploma, optometrists will also need to pass 3 national board exams (>10hr long for each test) to get their license and may need to take additional law exam depending on which state they want to practice in. Optometrists are responsible for visual aids but they are also highly trained for the diagnosis and management of ocular disease/trauma.
4. There is a lot of time and money involved. Make sure your sister knows what's she's getting herself into and be prepared for 4 years of hard works. Words of encouragement: My parents are also very poor - I worked to pay my way through schools and had scholarships with federal financial aids for my educational expenses. Nothing is impossible for your sister as long as she plans it well and works hard on it. Best of luck!
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