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Thread: BEWARE: Private loans provided through AUA impossible to repay

  1. #1
    emfellow88 is offline Newbie 511 points
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    BEWARE: Private loans provided through AUA impossible to repay

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    My fiance recently graduated from AUA class 2012 and is in her first year of her family medicine residency. Right from the start, the collections from the bank in which she got her private loans have continued to add countless hours of stress and turmoil through an already difficult year. Lets break down the numbers

    1)Total private loan debt around $200k with variable interest post graduation
    2)My fiance's starting salary as a resident roughly $46k
    3)After taxes and deductions such as health, life, disability, and dental insurance she brings in roughly $2700 a month
    4)Here's the kicker, just to pay off the INTEREST on private loans is roughly $1900. (Full monthly payment $4920)
    5)That leaves about 800 dollars a month to pay for housing, food, gas, utilities, and other essential cost of living items- IMPOSSIBLE

    If you read the fine print on the loan you are signing your soul off to, it states that there is only UP TO 6 MONTHS of forbearance and/or deferment once the loan is in collections after a 6 month grace period. After that, it is fair game according to the bank and missing any payment is punishable by an increase up to 25% in interest rates.

    So you're probably thinking, call the bank and see if there is a way to work out a more affordable option, right? WRONG! According to the bank, the standard repayment period is 10 years (120 monthly payments). There is no protection like federally backed loan, so there are not extended graduated payments, extended loan repayment times (ie 25 year instead of 10 year repayment plan) or lower fixed interest rate with consolidation. Oh by the way, filing chapter 13 bankruptcy does not clear the debt, but may be negotiated for a lower repayment reduction - which has already been denied for my fiance.

    What has AUA done about this? ABSOLUTELY NOTHING. We've called financial aid and have always gotten the run around without any resolution of economic hardship. In other words, they don't care once you finish medical school; they have already gotten paid and that avenue for help was quickly shut down. It is quite shocking that AUA would offer such a "loan shark" type of education loan that literally makes it impossible to pay out during residency without some sort of OUTSIDE ASSISTANCE. My fiance's family is considering taking a 2ndmortgage on their home just to pay off this horrible, horrible private loan. AUA just wants your money, and doesn't care how they get it.

    MORAL OF STORY? DO NOT GO TO AUA IF YOU ARE TAKING PRIVATE LOANS. Unless you have a sugar daddy or come from a family of wealth, you will be unable to pay down the loan and set for a lifetime of debt that is nearly imppossible to pay off. In other words, the bank will own you. I am sure this has been echoed many times before on this forum, but you will be in a lifetime of debt without the protection of a federally-backed loan.
    Last edited by emfellow88; 12-23-2013 at 06:02 PM.

  2. #2
    Lancelot is offline Member 520 points
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    Hi,
    I'm an AUA studet with this same worry. Regarding bankruptcy, I thought private loans were dischargeable? I know federal student loans are not. Why can't these AUA private loans be discharged in bankruptcy?

  3. #3
    jackets5 is offline Senior Member 682 points
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    Whos fault is it you signed for the loa. AUa dosent force people to take these loans they are an option. Also, if you don't read the terms of a loan before you take on 200k in debt your stupid and deserve everything you get.


    Quote Originally Posted by emfellow88 View Post
    My fiance recently graduated from AUA class 2012 and is in her first year of her family medicine residency. Right from the start, the collections from the bank in which she got her private loans have continued to add countless hours of stress and turmoil through an already difficult year. Lets break down the numbers

    1)Total private loan debt around $200k with variable interest post graduation
    2)My fiance's starting salary as a resident roughly $46k
    3)After taxes and deductions such as health, life, disability, and dental insurance she brings in roughly $2700 a month
    4)Here's the kicker, just to pay off the INTEREST on private loans is roughly $1900. (Full monthly payment $4920)
    5)That leaves about 800 dollars a month to pay for housing, food, gas, utilities, and other essential cost of living items- IMPOSSIBLE

    If you read the fine print on the loan you are signing your soul off to, it states that there is only UP TO 6 MONTHS of forbearance and/or deferment once the loan is in collections after a 6 month grace period. After that, it is fair game according to the bank and missing any payment is punishable by an increase up to 25% in interest rates.

    So you're probably thinking, call the bank and see if there is a way to work out a more affordable option, right? WRONG! According to the bank, the standard repayment period is 10 years (120 monthly payments). There is no protection like federally backed loan, so there are not extended graduated payments, extended loan repayment times (ie 25 year instead of 10 year repayment plan) or lower fixed interest rate with consolidation. Oh by the way, filing chapter 13 bankruptcy does not clear the debt, but may be negotiated for a lower repayment reduction - which has already been denied for my fiance.

    What has AUA done about this? ABSOLUTELY NOTHING. We've called financial aid and have always gotten the run around without any resolution of economic hardship. In other words, they don't care once you finish medical school; they have already gotten paid and that avenue for help was quickly shut down. It is quite shocking that AUA would offer such a "loan shark" type of education loan that literally makes it impossible to pay out during residency without some sort of OUTSIDE ASSISTANCE. My fiance's family is considering taking a 2ndmortgage on their home just to pay off this horrible, horrible private loan. AUA just wants your money, and doesn't care how they get it.

    MORAL OF STORY? DO NOT GO TO AUA IF YOU ARE TAKING PRIVATE LOANS. Unless you have a sugar daddy or come from a family of wealth, you will be unable to pay down the loan and set for a lifetime of debt that is nearly imppossible to pay off. In other words, the bank will own you. I am sure this has been echoed many times before on this forum, but you will be in a lifetime of debt without the protection of a federally-backed loan.

  4. #4
    greenmedic is offline Newbie 510 points
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    Back in the 90's the bankruptcy laws were amended which prevent discharge of Educational Loans, including Private Student Loans.

    HOWEVER
    , there's another option !

    Under Chapter 13 Guidelines, you can file for Bankruptcy, and have your Student Loans "deferred" for up to 5 Years.
    You would technically be in repayment but you would only be paying a nominal amount about $100-200 monthly to your loan creditors
    for 5 years.

    BUT, all of your non-educational loans and debt will be fully discharged.

    This will give you ample time to finish residency and get a job as a physician and pay your loans off under the normal terms.

    Find a bankruptcy lawyer that knows about these terms, not all of them do.
    Last edited by greenmedic; 12-24-2013 at 03:47 PM.

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    emfellow88 is offline Newbie 511 points
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    Quote Originally Posted by jackets5 View Post
    Whos fault is it you signed for the loa. AUa dosent force people to take these loans they are an option. Also, if you don't read the terms of a loan before you take on 200k in debt your stupid and deserve everything you get.
    I don't think you understand the point of the message. It is a warning to those considering private loans from a person who has made a terrible mistake and now is living with the consequences. Those who try to finance a medical education on AUA loans should seriously reconsider given the poor terms for condition. We all know that the protections that come with a federally backed loan are far superior; so anyone considering aua should look into schools like st George, Ross, or AUC and NOT Aua. Also don't forget the "great" customer service you get from AUA, but that is an entire subject matter on its own.

    You are absolutely right that my fiancé should have read the fine print; maybe it was her desire to become a physician that ultimately led to her blindness. She is lucky that I am also a physician and she has a family willing to make sacrifices so she won't stay perpetually in debt given the high interest rates of the "aua loan." Aua should also take some responsibility when offering these "loans" to desperate students trying to finance a medical career. This is a message to all those considering taking a private loan through aua; like I said earlier, unless you have a sugar daddy or come from a family of wealth, RECONSIDER AND GO SOMEWHERE ELSE OFFERING FEDERAL LOANS!
    Last edited by emfellow88; 12-25-2013 at 12:14 AM.
    Tipton likes this.

  6. #6
    emfellow88 is offline Newbie 511 points
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    what a horrible school, even for Caribbean standards!

  7. #7
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    dhermon is offline School Official 518 points
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    Please see the message below from AUA Director of Student Financial Services:

    Congratulations to your wife on graduating from AUA and matching into a residency program. I am happy to see that she accomplished her goals!

    I would like to address the comments that you have posted on ValueMD and think it would be to our mutual benefit to have your wife contact the Student Financial Services (SFS) department. We strive to provide excellent customer service and would be happy to assist her within our capacity. If you had an unsatisfactory experience while dealing with someone at AUA, I apologize on behalf of our department. It is not typical of our staff to provide less than superior customer service. Sometimes, when we don’t get the answers that we want to hear, we find it agitating and consider it “bad customer service.”

    Our staff is unable to speak to anyone except the borrower due to FERPA laws, which are similar to the privacy laws that apply to you as a physician. Please be assured that AUA has not only dedicated the past 6 months to securing manageable Financial Aid options for our students, but that our efforts are tireless and ongoing. Graduates of AUA have been contacted via email and telephone to be notified of two reduced repayment options that may be more affordable. Those that have difficulty repaying their full interest payments should contact SFS to discuss these options in detail.

    Moving forward, as the Director of Student Financial Services, I would be happy to speak with your wife and find a more affordable solution for her. Please direct your email to apusterla@auamed.org as ValueMD is not the appropriate forum to discuss personal SFS matters.

    Perhaps we were unable to reach your wife due to a changed email address or phone number so again, I encourage her to contact me directly. I am certain that together, we can find a solution and I hope to hear from her soon.
    Danielle Hermon
    Admissions
    (603) 892-6881
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    iwanabmd is offline Member 516 points
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    AUA has been offering options for repayment on these loans that make residency bearable. They have even extended forbearance in extreme cases. They are not just sitting back and watching people drown. I graduated in 2012. I am a pgy2. I was paying back 1000 a month on interest for 6 months. Called AUA, told them I couldn't do it anymore and they offered me there new repayment plan. The new plan details can be discussed over the phone with them but basically it should lower your payment to somewhere between 400-800 a month while in residency. AUA is not always evil guys, in fact I have noticed a lot more caring in the past 2 years then there use to be 5 or 6 years ago.
    STEP 1 [X] STEP 2 [X] STEP 3[X] PGY - 1 [X] PGY-2 [*]

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    Dr.Lee is offline Newbie 510 points
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    What?

    I do not think AUA is a horrible school but I am glad 'emfellow88' made his point because I am finding more things out before getting the private loan.
    Last edited by Dr.Lee; 10-22-2014 at 05:13 PM.

  10. #10
    Raj25 is offline Member
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    We had many lenders opt out because of cheating and criminal Manipal faculty and complaints made by our provost (Seymour Schawtz) and President (Neil *****).

    Shady interest schemes and add on fees keep piling up right through clinicals and residencies.

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