Episode 10: Financial Aid


David Owen, a Director of Admissions & Financial Aid at Pritzker, joins us to talk about the basics of financial aid.

If you have questions for us, please send them to pritzkerquestions@gmail.com.


Episode 10 Transcript

Ben Ferguson: Welcome to Episode 10 of the Pritzker Podcast! This is Ben and Mary once again and we are joined by David Owen, who is a Director of Admissions at the Pritzker School of Medicine, and he’s also a financial aid guru of sorts. David, did I get your title correct?

David Owen: You did!

BF: Financial aid guru?

DO: Financial aid guru…that’s exactly what I was hired as.

BF: Awesome!

Mary Bister: That’s a sweet job title.

DO: It is, it is.

BF: That’s what’s on your check stubs I guess.

BF: So, we’re happy to have David because we in fact are talking about financial aid basics today: what to know, what to expect if you plan on attending Pritzker sometime in the near future. And I think Mary and I will just go through a few questions that we have on hand, and David can try to touch on those aspects as much as possible. So is that okay with you, David?

DO: Sounds good.

§ “Costs To Expect”

BF: All right. So I think just to start off, David when people are applying to this schools and sort of thinking about the different expenses that come with that sort of environment what should they be expecting in terms of paying for flights and paying for hotels and stuff like that. What should they be expecting?

DO: Well, the application to medical school generally costs about $2,500, including the application through AMCAS, the MCAT fee, and then secondary fees to individual schools, flights, staying at hotels. $2,500 is about the average that students spend for an application to med school. And it’s a good idea to try to save for that rather than to put that onto a credit card. The last thing that med students want to do is head off to med school with credit card debt. We’re can talk about that later on.

BF: Sure. And obviously that changes a bit with the number of schools that people are applying to and so forth.

DO: That’s right.

BF: Yeah. Has that gone up in recent years or is that sort of been constant?

DO: The secondary fees seem to be pretty constant. AMCAS has increased their fees only a little bit over the past two or three years and the flights are going through the roof right now.

BF: Yeah.

DO: Hotel costs are up and the cost of a suit or a jacket for the interview days, that’s gone up too–and by the way students don’t need to go out and buy a new suit and certainly don’t need to go out and buy an Armani suit. They just seem to look professional on their interview day.

BF: Right. Well, I mean when I’m interviewing people I personally look for Armani but that’s just me.

MB: Right. You’re just picky Ben.

BF: Right. Okay, and so would you say most people, most students pay for this themselves or do they usually get help from an outside source or parents, or in your experience, what have you been exposed to?

DO: Most people pay for it themselves and unfortunately most people I think are putting it on their credit card, and it’s a risky thing to do if you’ve got a short window between the end of the application cycle and when you start med school to be able to pay off those costs because again, you don’t want to carry credit card costs with you to med school. That just eats into whatever budget the med school is going to give you–the living budget during medical school. So you don’t want to have credit card costs that you’re having to pay out of pocket, so maybe you can get a job in that summer while you’re doing your application to cover the costs during the application cycle; that’s a good way to do it.

BF: Sure. So okay, then when students eventually end up at the medical school of their choosing, what sort of costs should they maybe be paying attention to in terms of living expenses, the cost of an apartment, the cost to maintain a car and drive a car. What sort of things usually come up–and perhaps things that people maybe don’t consider initially?

DO: That’s a good question Ben, but I think I’d roll this back a little bit further, so when the student is off on the interview day, they should be talking with the financial aid person or the admissions officer about the cost of attendance at that particular school because that’s going to vary from school to school. So there are things that are common to all schools like tuition and fees, insurance, rentals and things, books, equipment rental and things like that. And those are published in the MSAR–the Med School Admission Requirements book–so students can get a little bit of an insight as to the cost of attendance for a school but that’s only part of it.The other part of the cost of attendance is what are costs to rent an apartment in the area, to feed yourself, to go out to movies in that area, to buy toothpaste–everything you’re going to need to do to be a med student. And that’s the figure that the students should ask for on the interview day–cost of attendance or student budget–and they want to ask that for all four years because sometimes schools, like Pritzker for example, the last two years are 12 month years. So there’s an extra quarter of tuition, there’s an extra quarter of rent that we budget you for. So it’s the third and fourth year are more expensive so they want to get the cost of attendance or student budget for all four years.

MB: Good to know.

DO: And so you rightly ask the question like for a car, some schools will include a budget for a car in the cost of attendance and other schools won’t, and so that’s the question to ask too so that the students can compare apples to apples. And they should also ask what kind of scholarship money is available and how do people pay for medical school at that particular medical school. And what the average debt is at graduation and does that debt include the people who have full scholarships like the Medical Scientist Training Program or military scholarships, so they can get a sense of what their debt might be at graduation. They should also ask if the school packages the individual to the full budget. There are some schools who will assume that the student’s bringing $10,000 to medical school in their first year, and they’ll package the student up to cost of attendance minus that $10,000.

BF: Right.

DO: And so suddenly you’ve got this burden of finding an extra $10,000 some place, which typically students take out in loans.

MB: Now, just to clarify is Pritzker one of those schools?

DO: We are not. We budget to the full cost of attendance so that students don’t have to make any guesses. We try to be as transparent as we can, both on our costs and how we help students pay for that.

BF: That’s quite an assumption to make, I think, for schools because I certainly didn’t have $10,000 in my pocket when I was coming.

MB: Me neither.

DO: It is a pretty big assumption and I think the other schools feel safe making this assumption because there is lots of loan money out there for students to tap into, but that’s not a hurdle we want to add to students’ trajectory into our school.

BF: Right.

DO: And so things that students typically use to pay for med school include income if they’ve been out working for a while. If they’ve saved some money, that would go toward paying for their medical school education and for–varyingly, schools will ask for parent support, either from the income or for the income and assets of parents. Pritzker asks for just information about the parental income for need-based scholarships and loans. And then we have scholarship money that we add to the pot for the incoming class. There are federal loans that students can get and there are private loans for students as well that the federal loans really cover all the cost of education currently. International students can’t tap into those federal loans so there are private loans for international students.

BF: Okay. And we can talk about the differences and specificities between those a little bit later I think.

DO: Good.

§ “School Budgets”

BF: So just to go back to the budget that most schools lay out, that–aside from the personal money that you were talking about earlier–those are designed to sort of include every aspect of everything students are going to spend?

DO: That’s right. Everything you need to be a student to move forward through your education. So it will be your living costs, transportation costs, books and rentals and fees, food, dry cleaning–all of those things that you need to maintain your status as a nice-smelling med student.

MB: Just out of curiosity, what sort of assumptions go into creating that budget? For example, do they assume that you’ll be living with a roommate or that you’ll be living alone, that you’ll be living in the surrounding neighborhood of the school, or that you might be living somewhere further away? What sort of student, I guess, do you have in mind when you create that budget?

DO: That’s a good question Mary, and I wish this is standardized across the board, but schools will look at that varyingly. They may assume that you’re going to live in housing that they provide or they may assume that you’re going to have a roommate. We in particular assume that you’ll have a one-bedroom apartment somewhere in the neighborhood of Hyde Park and so we give our students a $900 budget to meet that rental cost, and that will typically get you a one bedroom in Hyde Park, though it won’t get you a Lakeview [a more pricey neighborhood on the north side of Chicago].

MB: Right. But no, that’s very accurate.

DO: And then we look at what students are having to spend, we survey students every three years to find out if the numbers that we are expecting in the students’ budget are accurate, and we also adjust things for cost of living based on what the cost to live in the City of Chicago. So we try to adjust for food and personal costs and travel based on the federal cost of living guide.

§ “Financial Aid Specifics”

BF: Let’s talk a little bit about financial aid itself–how to apply, what all the different forms are, and so forth. So David, can you just talk a little bit about the different sources of financial aid first?

DO: Sure. The federal government assumes that students are going to take responsibility for their education. And they also assume that family is going to have something put in that. And so through the FAFSA, the Free Application for Financial Aid, which is found at fafsa.ed.gov, students will fill out their financial aid information, their income information, their parental income information, and submit that to the federal government, who then standardizes it and releases it to the schools the student wants it released to. Varyingly schools will ask for tax information and supporting documents for tax information for the student and parents, and they use that to guide the federal and their institutional money that they give to students.

So let’s talk a little bit about the income that the government expects students to give and then the support that is given outside. If students have income or savings, the government is assuming that those are going to be used up first in paying for medical school and so they will reduce need-based loan money based on the income and savings that a particular student has. Now, for the Perkins program and for other need-based programs, the government will also look at parent information and will look at their asset and look at their income to see whether students are eligible for Title IV programs like the Perkins program.And so the more asset that a student or parent has, the less likely that they will get need-based Title IV money. They still will qualify for Stafford money. Stafford money is based strictly on the student, on their income, and so if the student is been out working for a few years, they might not qualify for the subsidized Stafford money, if they’re making a significant income, but that has to be pretty big to completely take them out of the Stafford subsidized program. But in any case, they will qualify for the Stafford unsubsidized loan program and these loan programs are much bigger, much, much bigger, than what’s eligible for college students both in the annual amount–they can borrow up to $40,500 in the Stafford program and a lifetime borrowing of $224,000 in the Stafford program. So this is a program that really is designed for health profession students to allow them to meet the costs of paying for medical school. But the subsidized portion of it is a smaller portion of it and that’s the part that’s driven by the income that the student brings. Parental income is not in the picture for the Stafford program.

MB: For some people who might not be aware, what is the difference between the subsidized and unsubsidized Stafford loans?

DO: Oh, good question Mary. So the subsidized Stafford program means that while you’re in med school, while you’re in economic deferment after med school when you’re in a residency period, the government pays the interest that accrues on your Stafford loans. And for the Stafford program, currently it’s a fixed 6.8% interest rate that gets capitalized, which means that interest gets added to the loan at graduation and at the end of each year of economic hardship.But for a subsidized loan, the government picks up that tab. They pick up that interest and pay that on behalf of the student. For the unsubsidized program, that interest begins accruing immediately as soon as the money is turned into a check for the student and it will continue to accrue throughout medical school, throughout residency, fellowship. And as I said it gets capitalized or added to that loan at point of graduation and then typically every year thereafter. Lenders will capitalize it at various rates, and just as a heads up to people who are thinking about choosing a lender, look for the one that capitalizes the least often. What that means is the longer periods between when they add that interest to the loan principle so you’re paying for–when that interest is added to the loan principle you’re paying, from that point forward, the interest on the principle and on the interest. That’s what capitalization does, so look for an infrequent capitalizing lender and you’ll save some money.

BF: Who are all the lenders and how many are there?

DO: Well golly, there are 300+ lenders across the country.

BF: So can you list those?

BF: I’m just kidding.

DO: Do you want that alphabetically or…

BF: Please.

DO: Or by their account number?

BF: Please, and by heart.

DO: Schools–we have a short list, we have five lenders who are part of a preferred lender list and preferred lenders for the Stafford programs and the GradPLUS programs who have met the standard of what we’re looking for in lenders. So we offered this preferred lender list to a large number of lenders–in fact it was to the general population. We had about 15 lenders who contacted us, filled out our request for information, which was a survey that we asked about 40 different questions about the support services that they provide for students, back-of-house support for us when we’re working with the lender, the sort of fees they charge to students, or waive the benefits that they offer students once they go into repayment. And we calculated what would be the cheapest set of lenders for our students who provided the greatest amount of customer service and the greatest stability because this is a pretty unstable market right now. And so triangulating those things, we came up with a list of five lenders who turned out, as it turned out, both had the cheapest loans to offer and provided the greatest service. So it’s a pretty good set of lenders but students are under no obligation to use the lenders that we put on this list. We just try to do some leg work for students. And when students look at the lenders, they offer different benefits and the students ought to look at the benefits offered and see how those might apply to them in particular. So there’s still some thinking that the students need to do even if they go to our preferred lender list.

§ “Application Specifics”

BF: Let’s take a step back for a second and talk about the actual application process and sort of who even needs to apply for financial aid and what it’s based on, I guess. I know you talked about this a little bit before, but are most based on need or merit or are most sort of a mix of the two?

DO: Most are a mix of the two and so we’ll talk strictly about Pritzker at this point because I don’t know the mixes at other schools. So for Pritzker, if students want to have just merit money, we ask them to fill out a background information sheet and a Pritzker application. These give us some insight into the sort of qualities that the student brings forward so that we might be able to target them for additional scholarship money. But for merit money only, we don’t need any financial information from them. We just ask for those two pieces, the background information sheet and Pritzker application, so that we might be able to give them additional scholarship money, and that money will strictly be merit money. There won’t be any need-based scholarship money involved in that.

Now, if a person who wants to be considered for merit money and federal loans, then they need to also do their FAFSA and turn in their student taxes and supporting documents to us. That allows us then to run them through the federal system to qualify them for Stafford subsidized and unsubsidized loans as well as merit scholarship money. If they want to be considered for need-based scholarship money and need-based loans, these will be institutional scholarships and loans as well as the Perkins program. Then we also need in addition to the Pritzker application and the background information sheet, their FAFSA and students taxes and supporting documents, then we need their parent’s taxes and supporting documents. We try to give out the need-based scholarships and loans on a more democratic or equality-based fashion and so we need the parent information on that. And we use the parent income information, not asset information, in determining the distribution of need-based scholarships.So a student’s package might have just merit money, or it might have merit money and Stafford money, or it might have merit money and Stafford money and need-based scholarship and loan money, or it might have just loans. There are all sorts of combination that might occur from how the student qualifies, either on merit or need.

MB: Just to clarify–and this is a minor point that isn’t going to affect all that many students, but it affected me so I’m going to bring it up. This varies on the school, but there’s an age limit as to when your parents’ income stops mattering. I was wondering if you could comment on where that is at Pritzker.

DO: Sure, and you’re right. That does vary from school to school at what point the school will no longer consider parent information. Now, for the Stafford program, parent information is never considered. And for the Perkins, parent information will be considered but that’s done by the federal government. For need-based scholarship money and need-based loans, for example, we’ve got about $3 million of need-based scholarship money that we give out and about another million dollars of need-based loans, we will look at the parental information up and to the point where that student turns 30 before the start of that school year, and once the student hits 30 then we don’t consider parent information any longer. There may be circumstances where parental information would be waived even if the person is under of the age 30 before the start of that school year, but that’s on a case-by-case basis.

BF: So that’s per school year; it’s not just at the start of the medical career?

DO: That’s right.

BF: Okay.

DO: So if someone is 29 when they start med school, that information would be waived in their second year and if their parents had a significant income, and that significant income gets taken off the table, then they’re probably going to qualify for need-based scholarship money.

BF: Yeah. So it sounds to me like there’s a lot more of a judgment call, I guess, on your part than I expected, rather than just sort of popping some numbers in an algorithm and seeing what’s coming out.

DO: Well, for the need-based scholarship we actually have an algorithm that we use to determine how much need-based scholarship money we give using the calculations that the federal government uses to determine Perkins loans. And so we’re a little more generous than the government is in terms of giving the scholarship money, but using the same sort of cutoffs for different sort of Perkins eligibility, we will give scholarship money at a faster pace than the federal government does.

BF: When should students be filling out this FAFSA form?

DO: Students should be working on the FAFSA in January during their application year. That’s something they want to get to right away and then work on their student taxes as quickly thereafter as they can and get those turned in. And for almost all schools, they’re going to ask for parental information if the student wants to be considered for any need-based money. And there are some schools, some of the Ivys out east, who don’t give any merit money; everything is need-based, and so they require parental information for every incoming student if they want to get any scholarship money whatsoever. So it’s in the best interest of the student to get their parents on board as early as possible with their taxes too so that they can be considered for the need-based scholarship money at all the schools.

§ “When To Apply”

MB: Now, let’s just say you’re a procrastinator. When would be the deadline, hypothetically-speaking?

DO: Well, it’s typically it’s sometime in June or July that the money starts really getting pretty thin. So if the student wants to be considered for the greatest amount of need-based scholarship and merit money, they want to get that application in in early April or certainly by May. That will vary a little bit from school to school, but typically early spring is a good deadline to set for oneself for completing that application at schools.

BF: So this is sort of a rolling process; it’s not–all the packages aren’t awarded at the same time?

DO: That’s right because the admissions process has one major date and that’s May 15th when students have to decide between multiple acceptances and we want to give everybody a financial aid package before that date so they can take that into consideration when they’re choosing which school they’re going to go to, but apart from that, it’s really kind of a first-come, first-serve. There are some advantage being early but it’s not an absolute advantage.

BF: Right. Is that specific to Pritzker or is that across the board at every school?

DO: I can’t say that’s true at every school, but that’s the general pattern and certainly the pattern amongst school like Pritzker.

BF: You said students should be starting this FAFSA process in January. Say they haven’t been accepted at any schools in January; should they be listing all of the schools to which they’ve applied at that point?

DO: All the schools where they’ve interviewed.

BF: Oh, I see.

DO: Or are anticipating an interview.

BF: Okay.

DO: They’re got to release their FAFSA to all of those schools.

BF: Okay.

DO: So that as soon as that acceptance comes, the school can start working on a financial aid award for that student.

MB: And you can go back in and add schools later, true?

DO: Absolutely. And sometimes students will often need to go back and adjust their FAFSA because two or three schools to which they accepted or applied or interviewed at didn’t require parent information and another one does, so they go back and add their parent information and then they re-release that. Or their parents were resisting giving financial information and finally they are convinced and they go back and add that parental information in and then re-release the FAFSA to all the schools and so there’s all sorts of things that one can do updating the FAFSA–either additional schools or additional information–so it’s a dynamic process.

BF: Is this something that students need to do every year? Is this just at the start of medical school?

DO: Oh good. Good question. It is something that you need to do every year and because financial information changes and it generally changes pretty dramatically for the negative–income, I mean–for students once they start med school. Students tend to become eligible for additional low cost money as they’re going through med school. So income they had because they’re working for a few years, that goes away in their first year and then in their second year they tend to have a greater need and thus greater need-based scholarship or need-based loans.

§ “Repayment Details”

BF: You talked a little bit earlier about repayment of these loans and I know a lot of the loans have different deferment criteria and stuff like that. Can you talk a little bit about that, about the different loans and which have different deferment plans and which–I know you mentioned the unsubsidized Stafford one has the capitalization all the time, is that correct?

DO: Yeah. And in fact all loans will have a capitalization policy attached to them.

BF: Oh I see.

DO: And the lender whichever particular lender you’re working with will determine the pace that which that’s capitalized, and that’s one of the things that when you’re looking at a lender, you want to find out. When you’re considering a lender you want to find out how often they capitalize, and again the rule of thumb is the less often they capitalize the cheaper that loan is going to be, because you’re not paying interest on interest then.

BF: Okay. So capitalization, I guess, is a little bit different from deferment-proper.

DO: It is. So, let’s talk bout the Staffords for a moment. The Stafford program has a six-month grace period after graduation and the subsidized loans continue to be subsidized during that grace period; the unsubsidized loans continue to accrue interest during their grace period, but you’re not responsible to pay anything on those loans during that grace period. And that’s true for whether you’re a med student or a college student at the end of the six-month grace period. So that six-month grace period runs out, and at that point your options currently are to apply for economic hardship, which means that the amount you would need to pay each month for your loans exceeds 20% of your income. There’s a formula that you can check to see if you’d qualify for economic hardship, but almost all med students do qualify for economic hardship and so they’re able to not pay on their loans for a portion of their residency period. The subsidized loans continue to be subsidized and the unsubsidized loans will continue accruing interest during that economic hardship deferment.

And after economic hardship, when you use up that–and it’s currently three years so that’s likely going to change to no economic hardship after July of 2009–the options are to go into repayment and start paying on your loans or to do forbearance. And forbearance is an option that lenders offer for any borrower who happens to go into repayment but can’t make those repayments, either because the income is too little or the cost of repayment is too great in comparison to the income and forbearance–it doesn’t affect your credit rating. It’s a perfectly acceptable strategy to manage loans while students are in residency and in fellowship, although during forbearance, interest is accruing on all the loans whether they were subsidized or not.And so the loans are–the amount that you’re going have to pay back is greater throughout forbearance. And then following forbearance, you go into repayment where you actually paying down your loans. Physician salaries tend to be so great that it’s easy to pay down even the greatest of debts while in repayment. There are a variety of repayment options like income-sensitive where it’s the amount that you pay per month is a percentage of your income and so as your income rises, the payment that you make on a monthly basis rises. You can pay over 25 or 30 years or pay over 10 years. You can pay in a graduated fashion so for the first five years, it’s a low payment and the payment increases for the next five years and increases for the five years after that. But just be aware that the longer you choose to pay back those loans, the more that you’ll end up paying back because interest accrues and gets added in on an annual basis.

BF: What about students who choose to take a few years off to do research or something, does that deferment carry over until they actually graduate or is it a strict four years after they start?

DO: So if they take time between college and medical school.

BF: Sorry, if they take time, say, between second and third year medical school?

DO: Oh I see, yeah. So, if while they’re in medical school, they take time to do research or head off to do service project of some sort, if the school keeps them in full-time status, they will remain in full time status. So for Pritzker students, we allow sorts of vehicles where students stay as full-time med students even though they might be just doing research for that year, or they might be off on a service fellowship for that year, and we have ways of dealing with that, and so the students, all of their loans remain deferred throughout that period.

MB: When it comes to the forbearance option that you were talking about, is there a time limit on how long that option can be used?

DO: It’s typically applied for a six-month or annual basis and there are currently is no maximum amount of time though that’s at the discretion of the lender to give forbearance. The lender is interested in students being able to repay and so they understand that when salaries are low during residency and fellowship, that’s not a viable option, and so they’re generous about giving forbearance during that period. However, after one graduate starts their dermatology practice and…

BF: Like all of us.

DO: And are making $450,000 a year, the lender is going to be less likely to give forbearance.

BF: That’s my plan.

MB: You’re going to be an awesome dermatologist, Ben.

BF: Yeah for sure. I definitely have the board scores for that.

DO: So let’s talk about the Perkins program for a second. The Perkins program, which is much smaller because the government is not funding it nearly so much, still exists and it has a nine-month grace period following graduation and then the opportunity for economic hardship and then another six-month grace period when you go into repayment. So after forbearance or after economic hardship, when you’re about to go into repayment you have a number of months throughout economic hardship, throughout grace, that is a subsidized loan as well as throughout the medical school, that’s a subsidized loan, and Perkins is 5% interest rate too so it’s cheap money. Another program available to Pritzker students is a Pritzker loan, and those are 1-5% interest rate loans that have a one-year grace period throughout which they are subsidized as well as during medical school. And easy economic hardship deferment options throughout the remainder of fellowship and grace and much more general deferment options than currently reside federally.So, those can be deferred all the way to the point that you go into repayment. So those are the loan options that are out there for students currently and of course the cheapest money is scholarship money and we do our best for our students. And about 88% of our students get scholarship money–either are need-based scholarship money.

§ “International Students”

BF: What about international students? What do they do as an alternative to these federal loans?

DO: International students need to demonstrate that they can pay for the first year of med school and that’s how they get their visa, but some of that proof of payment might be in loans that they can take out while here. We’ve negotiated two loans for international students that students can sign on their own signature, which is very unusual for international students. Mostly they have to have a US cosigner who is either a citizen or permanent resident. But these we’re able to negotiate for international students just on their own signature. And so students can take out loans to help pay for medical school and we also provide them with some need-based scholarship and merit scholarship money but it’s mostly on their own resources or loans that they take out.

§ “GradPLUS and Loan Consolidation”

BF: Can we just talk real quickly about this GradPLUS thing that you listed and then maybe a little bit about consolidation. Do you know much about that David?

DO: I do. GradPLUS is a federal program that students are eligible for simply by a virtue of being a student. And it’s a higher-interest-rate program so it’s employed after the Stafford program runs out, either for its annual cap, or for its lifetime cap. And so GradPLUS money is kind of a safety net for students and the GradPLUS program you apply for through lenders just like you do for the Stafford program, though you’re made eligible for it by need that the school determines. GradPLUS money can be consolidated along with Stafford loans. Consolidation is a less common option now though; the federal government is still is offering consolidations with the direct loan program, and consolidation means that you pull together one or more loans and fix them at a particular rate. Now, you might remember that currently Stafford programs and GradPLUS programs are fixed rate loans to begin with. So there’s no compelling reason to consolidate those loans. But if a student has variable-rate Stafford loans, this coming year would be a great time to consolidate because that variable rate loan is going to be pretty low. It’s going to be at 4% or less and locking that in at 4% means that you’ve got really cheap money for many years to come.

BF: Is the consolidation compatible with the Perkins as well?

DO: It is compatible with Perkins and you can consolidate the Perkins into whatever other loans that you’re consolidating. The way that the rate is figured for consolidation is that it takes the interest rate of all the loans that you’re consolidating together so for variable rate loans, for after July 1st that would be about 4%. The Perkins is fixed-5% and if you were to add a fixed-rate Stafford Program at 6.8, it looks at how much in each of those loans’ rates and averages them together. So by adding higher interest rate loans, you’re driving up ultimately what that consolidation rate will be and so that’s a good reason to leave those higher interest rate loans out. You can run the numbers for yourself and figure out if that’s an interest rate that you’d like, especially for the convenience of having those other loans fixed in there. Having them all in one place certainly has advantages.

§

DO: So thank you so much for doing this.

BF: Thank you David.

MB: Thank you very much.

DO: Thanks Mary. Thanks Ben.

BF: Take care.

MB: All right, have a great day!

BF: So if anybody has questions for David, any follow up questions, or anything you think we might not have covered, you can feel free to email David at dowen@bsd.uchicago.edu and he’s happy to address any other issues that you might be having. And we’ll also take a lot of questions if you’ve got them, you can email pritzkerquestions@gmail.com and we’ll be happy to do a follow-up episode if there’s any glaring holes that we might have left in this episode because there’s certainly a lot of issues to cover about this topic. Thanks again David.

DO: Thanks everybody.

MB: Bye.