Building Credit

December 16, 2012 6:25 PM

Worried about how I'm going to take out medical school loans without a cosigner in two and a half years.

I don't know anything about building credit and have no cosigner for loans because I'm estranged from my parents. Reconciling is not an option due to abuse. I live off my FAFSA and pay rent with a majority of it to live in a shack on my aunt's property. No job, although I'm searching very hard. Despite my difficult circumstances, I manage to excel academically and extracurricularly with countless hours in volunteer and research experiences. I think I have a great shot at medical school... IF I can get loans for it!

A few google searches suggest that I open department store credit cards and call my bank, Bank of America, to see if they have student credit card options. Then use it to buy stuff I would otherwise buy in cash and pay them off completely every month. However, I just don't buy that much stuff, so should I only pay off the minimum for the sake of building credit instead?

I THINK I have no credit history, however I was irresponsible with my banking and over withdrew at the ATM a number of times with Bank of America. I also left a negative balance of a few dollars unresolved with my school's bank for a few months, although it was small enough not to assess a collection's fee. In addition, I left very little money in both banks (under $5) for a period of time. All of this has since been resolved, but I have no idea how those actions affect my credit.

In addition, I hear that having a job helps when taking out a loan. I'm currently enrolled in an EMT class. EMT-B jobs are hard to come by in southern CA, but if things work out as planned, I'd be working the remainder of my undergraduate years in an ambulance company.

I'm sorry if my question is all over the place. I'm really a newbie at all of this, and I'm afraid that despite my efforts now I would still have a difficult time taking out a loan for medical school. :(

posted by squirtle to Work & Money (16 answers total)

Call your local medical school's financial counselor.

You're not the first one to run into this issue, and you won't be the last! Good luck!
posted by gramcracker at 6:38 PM on December 16, 2012

This is not an authoritative answer, but the friends I have who have gone to medical school generally had better access to credit than they wanted. Lenders seemed to assume that becoming a doctor was a fairly strong guarantee of making money in the future, which could then be used to pay them back. It seems like you are over-worrying.
posted by croutonsupafreak at 7:04 PM on December 16, 2012 [1 favorite]

It's very simple. FAFSA and then they lend you full tuition, fees and modest living expenses. Not bases in credit rating (serious defaults aside) and no cosigner required. Quite surprising you don't know this -- you might want to see your premed adviser to make sure you aren't similarly misinformed about other elements of the qualification and application process, which are exceedingly specific. You also need to be sure the debt is worth it to you -- doctors' earnings are in play in the drama of health reform and budget reform and $250k of debt might not be justified if doctors start getting paid like civil servants.
posted by MattD at 7:09 PM on December 16, 2012 [4 favorites]

Response by poster: I talked to the financial aid people at my school and they said that FAFSA does not cover professional school, only undergraduate school. Maybe I heard them wrong? I'll Google around -- thanks!

edit: looks like this could be an option, thanks for correcting my misguidance
posted by squirtle at 7:12 PM on December 16, 2012

Aside from the question of whether you need good credit to get medical school loans, you should probably check your credit report just so that you know what's on it.

You're entitled to three free credit reports per year -- one from each of the three major credit bureaus. There's a lot of sketchy websites out there that are not what you want, but if you go to https://www.annualcreditreport.com/cra/index.jsp and fill out a little info, you'll be able to get 'em.

It's just nice to know if your credit was dinged for things or if they flew under the radar!
posted by itsamermaid at 7:24 PM on December 16, 2012 [2 favorites]

I filled out a FAFSA for my graduate program and was awarded a federal aid package.
posted by discopolo at 7:26 PM on December 16, 2012

Also, if you're just a sophomore, don't freak out until you get into med school. You might be able to defer, your parents might come around, anything could happen.
posted by discopolo at 7:28 PM on December 16, 2012

Your school is very wrong. In fact, a quick google search of "medical school and fafsa" bring up numerous medical schools that require it annually.

You need to call the schools where you wish to apply, not your current school, and especially if your current school is primarily undergraduate.
posted by zizzle at 7:30 PM on December 16, 2012 [3 favorites]

Are you a good enough student, and have enough of an interest in research, for an MD-PhD program? They're incredibly competitive and difficult, and they take eight years, but you come out loan-free.

Also, military service can give tuition aid and/or loan repayment. (Assuming you're in US and an American citizen.) Not a route I would take, personally, but it's out there.
posted by supercres at 7:44 PM on December 16, 2012 [1 favorite]

If you are a US citizen and get into medical school, you won't have a problem getting federal student loans. Build some credit now as it's generally a good idea to do that, but it won't be a deciding factor for getting student loans for medical school. If you're not a US citizen, you do have a bigger fish to fry as you will be ineligible for most loans and you'll have to find a way to essentially pay cash, and usually at a non-resident tuition rate.
posted by quince at 7:48 PM on December 16, 2012

The FAFSA absolutely does cover graduate school. However, it's probably not enough to cover med school tuition-- it certainly wasn't enough to cover my $50k a year grad school tuition.
posted by joan_holloway at 7:48 PM on December 16, 2012

Yep, I went to med school and I had *almost* enough to get by by maxing out Stafford subsidized and unsubsidized federal loans. I got a couple thousand from scholarships (I recommend applying to all the ones you are eligible for that are location specific) and took a loan of less than $10K from my parents. No private loans. However, tuition has increased since then, this was about 10 years ago-ish, but the financial counseling office exists to get you through this.

What I strongly recommend: GO TO STATE SCHOOL. If you don't get in the first time, spend a year doing resume-building volunteer work and moneymaking work, then reapply. Important enough to repeat: GO TO STATE SCHOOL. This will be the biggest path to lessen your debt burden you can take for med school. I went to a state school but not my own state, so I paid out of state tuition. Out-of-state or private tuition can be over 100% more than in-state cost.
posted by treehorn+bunny at 8:08 PM on December 16, 2012 [5 favorites]

You do not need anything from your parents or a cosigner to go to medical school, or for any graduate degree.

When I filled out the FAFSA I was able to check the box that said "I decline to submit information from my parents" and was awarded everything, no problems.

Your credit is only checked for grad plus, not stafford, and many of my friends who had really awful credit still got grad plus loans.

I've known hundreds of medical students and no student ever was unable to attend school or pay tuition unless they were attending a university outside of North America.

You are worrying about something that is not a possible scenario.
posted by hobo gitano de queretaro at 8:13 PM on December 16, 2012 [1 favorite]

If you don't have an official credit card (debit don't count), you don't have a credit record. I didn't have one whatsoever before then, it doesn't matter what you screwed up at your bank apparently. If you are still an undergrad student, GET ONE NOW. It will become a LOT harder (and you will be more fucked for credit for life, like I am) if you don't have one by the time you're out of undergrad. Right now they'll probably give you one like it's candy without being at all particular about it.

Get one, use it to pay your phone bill or some regular thing like that, and pay it off every month. You don't have to rack up debt on it--in fact, don't spend more than 30% of the available credit limit. This is unfortunately something that you have to do in order to have an adult life, regardless of your med school loans or not. I wish someone had explained that to me in college, but nope.
posted by jenfullmoon at 9:40 PM on December 16, 2012

Get a credit card, yes. Purchase your groceries and shit with it but don't run up the tab. Pay it off in full each month. That will help build your credit.
posted by J. Wilson at 9:50 PM on December 16, 2012 [1 favorite]

Also, being a graduate student means you count as independent for FAFSA purposes, regardless of your age. This page tells me that medical schools count your parents' income for institutional financial aid purposes, even though the federal government doesn't. If you want to be organised, you may want to look into how you would appeal against that policy. (See previously.)
posted by hoyland at 6:42 AM on December 17, 2012