CROSSROADS IN LIFE: Tuition pay by saved money or loan?

[cuteascanbe]

With grants and scholarships, I lowered my tuition & fees bill to $5,665 per year. My family does not have the ability to pay for this sum, therefore, I can only result in two options:

 

(1) Savings Account accumulated from the time of my birth $6000

(2) Loan from a federal/private sector (not stafford though)

 

What should I do? My savings can barely cover for it, but should I loan? I have co-op next year and am able to make approximately $15,990 per co-op cycle. If I loan, I will only have to pay interest for 18 months (1 year for this year, and half a year for co-op cycle).

 

I am at a crossroad, what should I do?

 

Please help as soon as possible!

[Guest Bree82]

Loans. $6000 is not that much - you dont want to deplete your savings. What if something happens, you dont have that money and now cant go to school because of whatever. Oh no. Why arent you going to get stafford loans? Did you fill out a FAFSA? Stafford is the BEST way to go. Private loans should only be taken out as a last resort. You do not have the protection you have with Stafford.

 

I thought I wouldnt qualify but unsubsidized are not based on need. Theyre at 6.8% right now AND dont have to be paid back until after you graduate. Im not understanding why you want to get private loans?

Edited September 7, 2008 by Bree82

[campusvitals]

I would agree with that it is a very good idea NOT to deplete you entire savings as you need to plan for an emergency or unexpected expense that might arise.

 

Stay away from private loans and get yourself a Federal Student Loan with a lower interest rate. If you were forced to go with a private loan, I might consider just paying for it.

 

So are you saying you are going to use the co-op money to pay your tuition gap for the next years and use the balance to pay down your student loan from this year?

[cuteascanbe]

Thanks for answering! Sorry for not specifying enough, I already took out the stafford (sub and unsub), that's why I want to look at others.

 

Basically, my school has a fix tuition rate for undergraduate years, and it's predicted I will pay $5,665 per year while I am an undergraduate. My income does not effect financial aid (except stafford) since other fin aid are based on merit.

 

It is very likely that I will make $15,990 for my 6 months co-op next year. And I will use that money to pay for tuition this year (if I took out loans) or add it to my bank account to fill in the hole.

 

More advice, please! Thanks!

 

****It really doesn't matter much if I took out a loan of 6.5% or 10.5%APR, since I WILL be paying all of it in 2 years comfortably (I still have half of co-op money, and I do repeat co-op cycle 3 times as part of education).

[xelda]

I would go with the loan. It will look good on your credit portfolio. Plus in a worst case scenario, if you run into financial problems or don't do the co-op, your loan payments will be deferred AND you will still have your savings as a back up.