Dental Dental loan question

[tantacles]

Hello

I am a non-trad student getting ready to start dental school this coming summer, and I have been able to save about $40K over my time out in the workforce. Would it be advisable to keep that money in savings over the four years as an emergency fund or use some or all of it toward the COA?

Thanks!

The answer to this question requires some math, so bear with me. Assuming that you get a grad plus loan for $40000 at the beginning of school, which is fixed at a 7.6% interest rate, and assuming that the interest compounds every month, in 4 years, the total of your loan will be: $54,158.82. Assuming you have more loans and it takes you 10 years to even start paying it off, that amount will grow to: $85,326.31

I used the following calculator to make this calculation:

Compound Interest Calculator | Investor.gov

Therefore, I think it is worthwhile to use at least some of your money to defray your ultimate loan cost. It can save you big. That being said, I would keep 8-10 months worth of this money in an emergency fund in case you need it. Try to live as frugally as possible. Things happen, and if you have some money left over, it will serve you well in case your landlord kicks you out, you have an unexpected flood, your partner or roommate doesn't pay rent, your house gets robbed, your apartment catches on fire, your computer suddenly breaks (are you getting the picture?), or any number of other catastrophes, a few of which have happened to me, occurs.

Best of luck making a final financial decision, and congratulations on your pending matriculation.

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[Mr.Smile12]

I'll add my mention of a collaborative resource that will help you figure out any decisions relative to your dental school loans: the AAMC/ADEA Dental Loan Organizer and Calculator.