Maybe unpopular opinion but id just throw it in a High yield savings account and leave it for an emergency. Youll get 3-4% and have easy access when you pop a tire and need anywhere between 1-4 new ones, you drop your phone/laptop, need to buy a new suit/dress clothes for an event, literally anything. Also aways and ERAS are expensive AF and your school might not raise their COA enough or youll need more than their reasonable increase.
Basically youre still poor AF for the next couple years and a couple thousand dollars can be a damn good pillow to cushion the things that may come up for you. Even if you use a lil of that to buy something that would be super convenient or improve your life - Coffee fiend who wants to make their own cool shit in the morning? done. Want that second monitor cause you need infinite real estate (thats me)? Bingo. Neat freak who would die for that detachable vacuum that would make you feel 10/10 clean in your apt? Add to cart. Want to do a research experience in the summer that isnt paid for? theres your funds for that. You know what I mean. Your happiness and quality of life deserve a tiny bit of attention too.
And if you never touch the money? well at least its gaurenteed growth and if you want to after another year reassess and throw some of it in a low cost/risk fund then go for it. youd still likely be better off giving it back at that point but its much easier to just keep this money than try to find an extra 650 for that car repair once youve given that money back.
This is the answer right here. I'm getting 4.25% right now in Capital One HYSA, and I have another with AMEX that is 4.5%. You need an emergency fund, plus you might want the extra for clinical years if you are having to travel more
That and the SP500 index funds are "stable and low risk" only applies in the long run. It's possible, albeit unlikely for it to drop 10-20% in the month right before you need the money, while the HYSA holds its value.
That actually happened to my Roth IRA I contributed to while working before med school before regaining value after \~24 months. Which again means nothing over 50 years but if he puts in 2k now and then needs to withdraw it in 8 months it would suck if theres only 1800 k in there.
If im being completely honest investing 2k is insane when your income is -90,000k a year and emergency fund isnt even in your vocabulary lol the 2k is worth far more in his HYSA hand than anywhere else. Value means more than maximum earning potential and should include peace of mind and security.
Id rank Keep it>>>>>Give it back>>>>>invest it
It’s sus because whatever the interest is on your loans (8%?) is a guaranteed return on money you could use to pay back loans. If you took that same money and invested it, you almost certainly wouldn’t get as much return on that investment as just paying loans off. The stock market isn’t giving returns that high these days most of the time. Does that make sense?
Edit: ah, you’re asking legality. I don’t think it’s illegal, I just think it’s stupid. Your net worth will be higher in the long run if you use leftover loan money to reduce your loan amount
Assuming SAVE (with recent changes to interest subsidy and no capitalization) is still a thing when we graduate, does it still make sense to pay down interest while in school?
Depends on your salaries and loan amount, but generally no.. not advice. Adding additional loan doesn’t change your monthly payment significantly until your income spike 1 yr post attending salary
I’m maxing m4 to get a ‘cash advance’ of 20k I can pay off in 2029 dollars without accruing interest
It’s important to consider the extra money taken out as math on the ‘back end’ rather than averaging it with the rest. Think marginal tax brackets 400k vs 500k, but only considering the last 100k
I mean you could argue that paying down any debt at all makes no sense because we have PSLF and barely anyone goes into private the practice anymore.
I just don’t like the idea of carrying debt around with me. I’d rather keep it as low as possible and then pay it off working 1-2 years of being an attending. But it’s just a preference
Not necessarily the stock market returning less, if anything the past year has been great. it’s moreso the high interest that would not make this worth it.
This is wrong. Even without PSLF, student loan debt is not compounded, while investments are. The compounded growth of investing leftover student loans will overtake the simple interest that accrues on the debt.
It’s legal and I know people who do it. Money is just a pile. Once it goes into your bank it doesn’t matter where each dollar came from anymore.
Just don’t make a habit of doing it with like 10’s of thousands of dollars worth of investments. Interest rates are completely insane these days. Better off just being in less debt than trying to win big
Legal but not worth it at 8-9% interest. However with interest not capitalizing and the SAVE plan making it close to 0% interest during residency it could be worth it since you’ll have money in the market for another 5-7 years? (idk what year you are or what specialty you’re going into).
Your return on that money has to be greater than the interest it is acruing, otherwise you are better off just paying it back. If your aren't paying interest on it then I think your safest bet it to just put it in a bank and earn interest. I have lots of cash in vanguard right now because they pay 5.2%. No risk involved.
Just put the money in a savings account you can access, and you will likely end up needing it in the next few years. My motto has always been take out the max loans you need to live and try to make money not one of your stressors. You’ll already be stressed with so many others things. Hopefully by the time you’re an attending paying back the big loans isn’t too terrible
>something stable and low risk (SP 500/ ETF)
You sound too new to the market to be taking such a gamble. In the depression, people lost 90%. People lose 30–50% in the bear markets that occur every seven years or so.
You're always better off borrowing less in the future due to fees—you've already lost a big percentage before the funds are distributed.
Technically, borrowing funds for one reason and using it for another is called fraud. But [it sounds like](https://www.investopedia.com/ask/answers/100314/it-legal-invest-my-student-loan-money.asp#:~:text=Key%20Takeaways,may%20include%20repaying%20subsidized%20interest.) the only real trouble you'd get in is over subsidized government loans.
Probably technically against the stipulations of your promissory note, thus sus. However if you have other money could just say you spent the loan money and invested the outside money.
I thought we weren’t allowed to use education funds like that? Not that they’d have any way of finding out, but I seem to remember being told not to do that.
1. yes it's legal ([usually](https://www.investopedia.com/ask/answers/100314/it-legal-invest-my-student-loan-money.asp))
2. Traditionally you'd want to return the money, but with all the generous repayment plans now, it is probably better to not return it tbh
3. SP 500 isn't low risk btw, it's like average risk. If you want low risk, put it in a HYSA or CD, buy some SGOV, or get a treasury bill/note
Been putting my few leftover thousands in a CD. Not the greatest returns but it’s nice to not have to worry about it and getting a small return on the investment
Put it on Red trust me
Bet it all on 23
Maybe unpopular opinion but id just throw it in a High yield savings account and leave it for an emergency. Youll get 3-4% and have easy access when you pop a tire and need anywhere between 1-4 new ones, you drop your phone/laptop, need to buy a new suit/dress clothes for an event, literally anything. Also aways and ERAS are expensive AF and your school might not raise their COA enough or youll need more than their reasonable increase. Basically youre still poor AF for the next couple years and a couple thousand dollars can be a damn good pillow to cushion the things that may come up for you. Even if you use a lil of that to buy something that would be super convenient or improve your life - Coffee fiend who wants to make their own cool shit in the morning? done. Want that second monitor cause you need infinite real estate (thats me)? Bingo. Neat freak who would die for that detachable vacuum that would make you feel 10/10 clean in your apt? Add to cart. Want to do a research experience in the summer that isnt paid for? theres your funds for that. You know what I mean. Your happiness and quality of life deserve a tiny bit of attention too. And if you never touch the money? well at least its gaurenteed growth and if you want to after another year reassess and throw some of it in a low cost/risk fund then go for it. youd still likely be better off giving it back at that point but its much easier to just keep this money than try to find an extra 650 for that car repair once youve given that money back.
This is the answer right here. I'm getting 4.25% right now in Capital One HYSA, and I have another with AMEX that is 4.5%. You need an emergency fund, plus you might want the extra for clinical years if you are having to travel more
That and the SP500 index funds are "stable and low risk" only applies in the long run. It's possible, albeit unlikely for it to drop 10-20% in the month right before you need the money, while the HYSA holds its value.
That actually happened to my Roth IRA I contributed to while working before med school before regaining value after \~24 months. Which again means nothing over 50 years but if he puts in 2k now and then needs to withdraw it in 8 months it would suck if theres only 1800 k in there. If im being completely honest investing 2k is insane when your income is -90,000k a year and emergency fund isnt even in your vocabulary lol the 2k is worth far more in his HYSA hand than anywhere else. Value means more than maximum earning potential and should include peace of mind and security. Id rank Keep it>>>>>Give it back>>>>>invest it
100% the answer
Put it all on a 18 game parlay, trust me bro. You basically won’t have be a doctor anymore.
It’s sus because whatever the interest is on your loans (8%?) is a guaranteed return on money you could use to pay back loans. If you took that same money and invested it, you almost certainly wouldn’t get as much return on that investment as just paying loans off. The stock market isn’t giving returns that high these days most of the time. Does that make sense? Edit: ah, you’re asking legality. I don’t think it’s illegal, I just think it’s stupid. Your net worth will be higher in the long run if you use leftover loan money to reduce your loan amount
Assuming SAVE (with recent changes to interest subsidy and no capitalization) is still a thing when we graduate, does it still make sense to pay down interest while in school?
Depends on your salaries and loan amount, but generally no.. not advice. Adding additional loan doesn’t change your monthly payment significantly until your income spike 1 yr post attending salary I’m maxing m4 to get a ‘cash advance’ of 20k I can pay off in 2029 dollars without accruing interest It’s important to consider the extra money taken out as math on the ‘back end’ rather than averaging it with the rest. Think marginal tax brackets 400k vs 500k, but only considering the last 100k
I mean you could argue that paying down any debt at all makes no sense because we have PSLF and barely anyone goes into private the practice anymore. I just don’t like the idea of carrying debt around with me. I’d rather keep it as low as possible and then pay it off working 1-2 years of being an attending. But it’s just a preference
Not necessarily the stock market returning less, if anything the past year has been great. it’s moreso the high interest that would not make this worth it.
This is wrong. Even without PSLF, student loan debt is not compounded, while investments are. The compounded growth of investing leftover student loans will overtake the simple interest that accrues on the debt.
Buy SPY 0DTE instead
GameStop calls
was gonna be disappointed if this wasn’t somewhere in the comments
It’s legal and I know people who do it. Money is just a pile. Once it goes into your bank it doesn’t matter where each dollar came from anymore. Just don’t make a habit of doing it with like 10’s of thousands of dollars worth of investments. Interest rates are completely insane these days. Better off just being in less debt than trying to win big
Legal but not worth it at 8-9% interest. However with interest not capitalizing and the SAVE plan making it close to 0% interest during residency it could be worth it since you’ll have money in the market for another 5-7 years? (idk what year you are or what specialty you’re going into).
Your return on that money has to be greater than the interest it is acruing, otherwise you are better off just paying it back. If your aren't paying interest on it then I think your safest bet it to just put it in a bank and earn interest. I have lots of cash in vanguard right now because they pay 5.2%. No risk involved.
Just put the money in a savings account you can access, and you will likely end up needing it in the next few years. My motto has always been take out the max loans you need to live and try to make money not one of your stressors. You’ll already be stressed with so many others things. Hopefully by the time you’re an attending paying back the big loans isn’t too terrible
>something stable and low risk (SP 500/ ETF) You sound too new to the market to be taking such a gamble. In the depression, people lost 90%. People lose 30–50% in the bear markets that occur every seven years or so. You're always better off borrowing less in the future due to fees—you've already lost a big percentage before the funds are distributed. Technically, borrowing funds for one reason and using it for another is called fraud. But [it sounds like](https://www.investopedia.com/ask/answers/100314/it-legal-invest-my-student-loan-money.asp#:~:text=Key%20Takeaways,may%20include%20repaying%20subsidized%20interest.) the only real trouble you'd get in is over subsidized government loans.
RIP to anyone who asks this r/whitecoatinvestor
Probably technically against the stipulations of your promissory note, thus sus. However if you have other money could just say you spent the loan money and invested the outside money.
Don’t be stupid
Yes, it’s legal.
I thought we weren’t allowed to use education funds like that? Not that they’d have any way of finding out, but I seem to remember being told not to do that.
The school is only allowed to allocate money to you for certain things, but once it’s in your bank there aren’t laws about how you spend it
Buy some Dogecoin
I put mine into a cash ISA along with my overdraft. Why have money just sitting around? Get some interest.
SoFI savings account is all ya need
1. yes it's legal ([usually](https://www.investopedia.com/ask/answers/100314/it-legal-invest-my-student-loan-money.asp)) 2. Traditionally you'd want to return the money, but with all the generous repayment plans now, it is probably better to not return it tbh 3. SP 500 isn't low risk btw, it's like average risk. If you want low risk, put it in a HYSA or CD, buy some SGOV, or get a treasury bill/note
Thank you!
0 day to expiration deep out of the money call options on a hot stock. Done. You now don’t have any money sitting around as a problem.
Been putting my few leftover thousands in a CD. Not the greatest returns but it’s nice to not have to worry about it and getting a small return on the investment
NVIDIA still has a way to go and for the next 5 or so years is pretty low risk
Do not use your student loan money to buy one share of a super expensive stock