Going from full-time work to med

[shining]

Hey everyone, long-time lurker here! I’m so grateful to be starting med this fall! I’ll be entering med as a second career/ non-trad student. While working, I built up an emergency fund, started to invest in ETFs, and pay down my loans (LOC + OSAP). Now that I’m going back to school, my income flow is basically going to be non-existent. I wanted some advice/multiple opinions on financial next steps.

Would a med LOC now exist as my “emergency fund” now that I’d be expected to use the existing one to pay for school?

I’m still working this summer; would it be better to save the money that I’ve been allocating to pay down my existing LOC?

Same with my ETFs, would it be best to pause putting money into it until I’m making an actual income as a resident? I’m not sure how I feel about investing my loan money atm.

I have to apply for OSAP as part of my bursary requirements but I know that I'll hit my lifetime limit during the program. Does anyone know if the monthly payments have to be made during school?

 

Thanks in advance!

[bearded frog]

If you already have a LOC then your ability to get a new LOC will be limited, but you can look into increasing it if needed, or transferring to a medicine LOC. You might also be limited by pre-existing assets. The interest on your LOC and the return on your investments will guide you towards paying down your LOC or not. Usually OSAP is payment and interest free while you're in school full time. I would encourage you to talk to a financial advisor for specific guidance.

[frenchpress]

Don’t know anything about osap. But you should absolutely look into transferring your loc - unless your current job is also a professional, it’s uncommon to have an unsecured loc for 350k at prime minus 0.25%. You should be eligible for the same loc as any other med student if you consolidate your existing loc onto it as part of the process, and then you should be able to reduce the interest you’re carrying. Talk to someone at one of the big banks (RBC and Scotia tend to have the most flexible plans) who is part of a team dedicated to their health care plan.

Would probably pause your ETF contributions. It’s not worth the potential risk to leverage yourself for investments that could decrease in value significantly. 

Also recommend talking to a financial planner. If you have the means it might be worth actually getting a fee-based financial planner (as opposed to one from the bank). I was also non-trad, with savings, investments and rrsp, stuff like that. I paid a few hundred dollars before medical school to get a financial plan put together for me about how to go about paying for school and balance living off my savings with borrowing, and it was far more comprehensive and saved me way more money than what the bank advisor or financial advisor at my school was able to do. 

 

[Persephone]

I had a previous LoC of $40k before entering med school. I had no trouble getting a med student LoC, I just consolidated the debt so that I was starting out $40k into my new LoC. I also switched banks to do this (from CIBC to Scotia). You do not have to pay OSAP back while in school, if that's what you meant. You also do not have to pay principle back on the LoC while in med school, and if you go with Scotia you won't have to pay principle back until you are out of residency. It just deducts interest like any other LoC in the meantime.

[frenchpress]

2 hours ago, Persephone said:

I had a previous LoC of $40k before entering med school. I had no trouble getting a med student LoC, I just consolidated the debt so that I was starting out $40k into my new LoC. I also switched banks to do this (from CIBC to Scotia). You do not have to pay OSAP back while in school, if that's what you meant. You also do not have to pay principle back on the LoC while in med school, and if you go with Scotia you won't have to pay principle back until you are out of residency. It just deducts interest like any other LoC in the meantime.

RBC now offers a professional loc to medical students that continues into practice, so you don’t even need to pay the the principal down after residency. I had heard Scotia now had a similar product, although people have reported difficulty getting Scotia to switch them to it if they have the old student loc

[shining]

On 5/29/2021 at 11:37 PM, frenchpress said:

Also recommend talking to a financial planner. If you have the means it might be worth actually getting a fee-based financial planner (as opposed to one from the bank).

Do you have any recommendations for a good planner?

 

On 6/1/2021 at 8:36 AM, Persephone said:

You do not have to pay OSAP back while in school, if that's what you meant.

I know I don't have to pay at the beginning but I'm not sure what will happen when I hit my lifetime funding limit of 340 weeks; it'll be sometime while I'm still in the program. 

 

My current LOC is with RBC and I've been with Scotia for a long time too so I might see who can offer me better perks. Thanks for the insight!

[frenchpress]

36 minutes ago, shining said:

Do you have any recommendations for a good planner?

Not in Ontario, sorry!