@AsifN before you do ANYTHING, please be sure you understand the Repayment plans available and the PSLF (Public Service Loan Foregiveness Program) from government loans. I appreciate you stated you don't want him to take the loan.
The repayment plans may be as little as the lesser of the fully amortizing payment over a 10 year period OR 10% of income (over gov'ts family poverty level calculation). In the early years post medical school, the 10% of income is the lesser and after residency (and fellowship) those last years are limited by the fully amortizing payment. it is a great, great deal.
PSLF which covers public workers and those working for non-profits, and most every hospital is a non-profit.
Once your child has worked in a hospital or other non-profit situation for 10 years (120 payments), whatever the remaining balance is gets WRITTEN OFF with no tax implications!!
While the repayment plans are advertized as 20-25 years until the writeoff (and after 2025, the write-off is taxable income!), if the student is eligible for PSLF, it is written off after 10 years and the write-off is NOT taxable income.
it is FAR CHEAPER than liquidating an IRA. His debt burden goes away quickly post residency. (I have experience with this as my child is now a doctor and I figure upwards of half his debt will be written off in 3 more years with no tax implications).
