Will Economic recession have effect on Medical school applicants?

[grapz]

What do you guys think?

[Jixe]

If you're speaking in terms of financing medical school education, I think banks will be MORE willing to lend to medical school applicants over businesses. Prime lending rate fell 25 points yesterday - it's a great time to borrow money!

[Jochi1543]

If you're speaking in terms of financing medical school education, I think banks will be MORE willing to lend to medical school applicants over businesses. Prime lending rate fell 25 points yesterday - it's a great time to loan money!

 

Why? I'm not sure I get it. Wouldn't the banks want to lend money at HIGH rates? Low rates are good for borrowers, not banks.

[Jixe]

Why? I'm not sure I get it. Wouldn't the banks want to lend money at HIGH rates? Low rates are good for borrowers, not banks.

 

Sorry, I meant borrow! That being said, banks still profit from lending money at low rates as well!

 

Interesting article: http://www.reuters.com/article/ousiv/idUSTRE4981X220081009 - Canada's banking system rated the world's best.

[Alastriss]

wait I thought interest rates would go down?

People who need money for living are not likely to invest it for the future right? (haven't hit that chapter yet in Micro econ)

[grapz]

They want to lower interest to stimulate the economy back up again. But this doesnt' solve any problems. Even tho lending rates are decreased, their evaluation on whether or not to lend you the money has greatly increased. So they're less lenient on lending even though their interest rates dropped.

[Halcyon]

When the economy takes a dive, governments tend put their resources towards keeping the country's economy stable. In other words, less money into funding medical school spots! Think 1990's and the health care cut backs. Hopefully it doesn't get that bad.

[THX]

Anyway you look at it, a poor economy is bad for medical students. It will be more difficult to receive a LOC (might need a co-signer if the crunch continues long-term) and as someone else said, the government will be less inclined to spend money on healthcare/education.

[Alastriss]

Anyway you look at it, a poor economy is bad for medical students. It will be more difficult to receive a LOC (might need a co-signer if the crunch continues long-term) and as someone else said, the government will be less inclined to spend money on healthcare/education.

 

well, there are a bunch of effects, so putting our premed pessimism aside, getting LOC's being harder is more complicated.

 

A bad economy is bad, but some things are inelastic. Physician's incomes are more resilient to changes in the economy as is the need for health-care.

[Jochi1543]

They want to lower interest to stimulate the economy back up again. But this doesnt' solve any problems. Even tho lending rates are decreased, their evaluation on whether or not to lend you the money has greatly increased. So they're less lenient on lending even though their interest rates dropped.

 

Tell me about it, I asked for a student LOC for under $7000 this week and they said I needed a cosigner "despite very good credit history." WTF!?

[THX]

well, there are a bunch of effects, so putting our premed pessimism aside, getting LOC's being harder is more complicated.

 

A bad economy is bad, but some things are inelastic. Physician's incomes are more resilient to changes in the economy as is the need for health-care.

True, but the credit market is tight, the economy is heading south and therefore from the bank's perspective it is riskier to offer a loan now than it was two years ago. The moment banks perceive risk they want assurances to alleviate the risk. It's the very reason why you must have a co-signer for med school abroad - the bank wants a guarantee in face of a riskier venture. If the credit crunch continues, medical students for Canadian schools will require a cosigner - I think that's pretty much guaranteed.

[Jixe]

True, but the credit market is tight, the economy is heading south and therefore from the bank's perspective it is riskier to offer a loan now than it was two years ago. The moment banks perceive risk they want assurances to alleviate the risk. It's the very reason why you must have a co-signer for med school abroad - the bank wants a guarantee in face of a riskier venture. If the credit crunch continues, medical students for Canadian schools will require a cosigner - I think that's pretty much guaranteed.

 

I'm with you as far as on requiring a cosigner for students who pursue their medical education abroad (only because they may never return). That being said, financing medical students in Canada is pretty much as minimal risk as you can get. Hell, I bet some analysts would consider it as a hedge against riskier ventures (lending money to businesses or even issuing mortgages). I can't imagine the big banks ever requiring a cosigner.

[Jixe]

Tell me about it, I asked for a student LOC for under $7000 this week and they said I needed a cosigner "despite very good credit history." WTF!?

 

That's pretty typical if you have don't have much income. As an undergraduate you'd need a cosigner, unless you really pushed the manager.

[Alastriss]

Prime Rate Down To 4.5 Woohooo

[Jochi1543]

That's pretty typical if you have don't have much income. As an undergraduate you'd need a cosigner, unless you really pushed the manager.

 

However, that doesn't do anything to explain why I have a rather large credit card limit that keeps increasing constantly (altogether, they've increased my limit by 5x in the last year) - I don't have a cosigner for my CC.

[Alastriss]

oh btw, are LOCs to go abroad (to the US) prime rate or pr + 1%?

[Jixe]

However, that doesn't do anything to explain why I have a rather large credit card limit that keeps increasing constantly (altogether, they've increased my limit by 5x in the last year) - I don't have a cosigner for my CC.

 

It sucks, but that's the way it rolls. Do you have a student credit card? If so, the limit shouldn't be over $3000. If it's a regular card, it'll continue to go up (especially if you carry a balance); banks would love to tie you up in (potential) debt with high interest rates. A line of credit has a much lower interest rate.

[Jochi1543]

It sucks, but that's the way it rolls. Do you have a student credit card? If so, the limit shouldn't be over $3000. If it's a regular card, it'll continue to go up (especially if you carry a balance); banks would love to tie you up in (potential) debt with high interest rates. A line of credit has a much lower interest rate.

 

Makes sense. They actually raised their CC rates this season, too! I called to see why, given that I've never made a late payment or done anything else that would warrant being penalized, and they said it's just a bank-wide increase - they are increasing the rate on all credit cards for everyone.

 

URGH.

[Jixe]

oh btw, are LOCs to go abroad (to the US) prime rate or pr + 1%?

 

Prime. Don't even settle for prime + 0.25%.

[Pantaloons]

Personally, I'm suspending my academic career until this crisis is resolved. Tough times call for bold action.

[The Law]

Personally, I'm suspending my academic career until this crisis is resolved. Tough times call for bold action.

 

ZING!!!!!!!!!!

[Alastriss]

True, but the credit market is tight, the economy is heading south and therefore from the bank's perspective it is riskier to offer a loan now than it was two years ago. The moment banks perceive risk they want assurances to alleviate the risk. It's the very reason why you must have a co-signer for med school abroad - the bank wants a guarantee in face of a riskier venture. If the credit crunch continues, medical students for Canadian schools will require a cosigner - I think that's pretty much guaranteed.

 

 

You are right regarding the bolded part, it will be so risky for them to give loans out in general, but do you really think its risky to give it to a physician-to-be? in the worst of times, you cut down on luxuries - your bmr, your xbox360, your steak. You make cuts here so you don't cut down on the basic necessities such as healthcare.

 

 

I agree with you, well we certainly have points. I think that what jixe said is right on, in the coming years investing in someone's medical education may be by far the safest thing. I can see that going abroad you will require a cosigner and that I definitely agree with you, but for medical schools in canada it may be one of the more safer things that a bank will be able to actually make money off of in times to come.

[bnface]

I think that what jixe said is right on, in the coming years investing in someone's medical education may be by far the safest thing. I can see that going abroad you will require a cosigner and that I definitely agree with you, but for medical schools in canada it may be one of the more safer things that a bank will be able to actually make money off of in times to come.

 

This is all fine and dandy if the system remains the way it is. However, there has been talk of eventually allowing IMGs to compete in the first iteration of the CARMs match. I have actually heard profs/physicians say that within the next 5 years, IMGs will be allowed in the first iteration of the CARMS match. THIS IS PROBLEMATIC., as CARMS spots are already limited for Canadian medical grads (except family med, of course). Increasing competition for these spots would result in more unmatched CMGs (Canadian medical grads). Read CFMS position on this for some insight:

 

"A system in which CMGs are not guaranteed access to PGME is unacceptable ... Many students rely on bank loans and lines of credit to finance their medical education. If CMGs were not guaranteed PGME, financial institutions would perceive a higher risk in lending to medical students. They would be less likely to provide the financial support that is required by increasing numbers of medical students. This would only reinforce the socio-economic barrier that exists secondary to the national trend of relentless tuition fee increases. The net result would be that only students with wealthy families could afford to finance a medical education."

 

Full position statement available at: http://www.cfms.org/representation/papers_view.cfm?id=10&what_section=representation

[abcwxyz]

Canadian medicine is rather protectionist; I really don't think you need to worry about job security from IMGs. I think it's perhaps just xenophobia that foreigners are going to come here and take your jobs, rendering you broke and unable to pay your loans. I also doubt that insurance companies see it this way.

 

Nurse practitioners on the other hand...

[Alastriss]

This is all fine and dandy if the system remains the way it is. However, there has been talk of eventually allowing IMGs to compete in the first iteration of the CARMs match. I have actually heard profs/physicians say that within the next 5 years, IMGs will be allowed in the first iteration of the CARMS match. THIS IS PROBLEMATIC., as CARMS spots are already limited for Canadian medical grads (except family med, of course). Increasing competition for these spots would result in more unmatched CMGs (Canadian medical grads). Read CFMS position on this for some insight:

 

"A system in which CMGs are not guaranteed access to PGME is unacceptable ... Many students rely on bank loans and lines of credit to finance their medical education. If CMGs were not guaranteed PGME, financial institutions would perceive a higher risk in lending to medical students. They would be less likely to provide the financial support that is required by increasing numbers of medical students. This would only reinforce the socio-economic barrier that exists secondary to the national trend of relentless tuition fee increases. The net result would be that only students with wealthy families could afford to finance a medical education."

 

Full position statement available at: http://www.cfms.org/representation/papers_view.cfm?id=10&what_section=representation

 

 

Uhh, I don't know how to break it to you, but IMGs have been in the first iteration of carms since 2 cycles ago. There was a big ass thread about this being discussed amongst the med students and the results were that Canadian grads were not the least bit compromised. Just because they are in the first iteration, doesn't mean they are chosen over canadian grads. Do a search and you will find this.

 

here is a link but I suggest you go to the carms forum or do a search for the 2934832480329420843 post long thread.

 

http://carms.ca/eng/r1_eligibility_e.shtml