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Author: chazzerei Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121572  
Subject: college loan Date: 6/5/2003 12:18 PM
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Hi! This is my 1st posting on this site! I have 2 teenagers going to college this year. My son is a sophomore at a private university. My daughter will be a freshman at a state university. Our daughter has available funds to cover 2.5 years for college. Our son who is going to a private college will need funds for the remaining 3 years. The school offers a Tuition Stablization Program in which the tuition is locked into this year's rates if we prepay for the remaining years. That means we save on any possible tuition increases for his junior and senior year. Whatever is prepaid is fully refundable if he opts to go to another school before graduating. My question: This would be a 90k investment for education payable this year. We will have 30K balance due for our daughter's school 2 1/2 years down the road. Should we look into a loan for our son through a bank or offer a personal loan from our nonretirement funds charging a nominal interest? The loan would begin payments 1 year after graduating from the university and would be fully paid in 10 years. These funds would not come from our retirement funds. Would the parents be able to take a deduction against their AGI for taxes in 2003? Would our son be able to deduct the interest paid if the loan came from the parent's funds? Also by using 90K in funds in 2003, do you believe this would help us for future grants, scholarships or subsidized loans.. beth
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