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Do your FAFSA and talk to the school's financial aid office. Subsidized loans would be fantastic, but if the interest rate is low enough on unsubsidized loans, the math may still be in your favor.
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I have enough invested money to cover tuition. Should I keep that money invested and take out a student loan to cover tuition?

Can you get a subsidized loan? Or will it be unsubsidized and start charging interest immediately? If you can get a subsidized loan, it might be reasonable to use a student loan as a margin loan. I would strongly suggest having a plan in place to pay the loan off before the loan starts charging interest.

If you cannot get a subsidized loan, I would suggest that you not take out a student loan. While student loans can be considered 'good' loans, they have significant downsides. Unsubsidized loans add interest on while you're in school, so you end up owing more than you actually borrowed to start with. And student loans are very difficult to get rid of in bankruptcy. If you fall behind on student loan payments, any Federal tax refunds and even SS can be taken to pay the loan back.

AJ
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Is this for you, or for a child?

If for you, ditto what AJ said.

If for a child, AJs advice to look at subsidized loans is good, but you need to think about what you had originally planned to use the invested money for. Taking money out that is invested for retirement to pay for your kids college may be a bad long term call.

And the personal opinion of someone who successfully paid off their own loans - do not cosign a student loan with a child.
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Do your FAFSA and talk to the school's financial aid office. Subsidized loans would be fantastic, but if the interest rate is low enough on unsubsidized loans, the math may still be in your favor.
Print the post Back To Top