<p>My daughter will be attending Cornell in the fall. We recieved a generous grant as well as $7500 in offerred subsidized and institutional loans . We have enough in savings to cover the EFC this year without the loans, but we will have to start some borrowing after that. Are we better off accepting the loans Freshman year because the terms are so favorable--or paying the entire bill and having less in savings for next years FAFSA? I am afraid if we don't take advantage of these loans now, when she is a Jr and Sr we will have to borrow more from private sources at a higher rate.Thanks for your comments.</p>
<p>This post is probably more suitable for Financial Aid Board.</p>
<p>Nevertheless, if I were you I would at least accept subsidized portion of the loan, because it is interest free until after graduation.</p>
<p>I would accept the loan as you don’t know what next year will hold. Keep your savings for as long as you can.</p>
<p>Understand that you will pay an origination fee - I think it’s 4% - so it’s not really “free” to use it for four years. Other than that, why not?</p>
<p>My thought on student loans, take one loan out, even if you don’t need it. It will help build a credit rating down the road for the student. $7000 is a reasonable loan amount and should be fairly easy to pay off for any occupation down the road. Pay the loan for a couple years, get a nice credit history established and then pay off the loan in full if you need. Payment on that loan will be under $100/month-probably about $60/month down the road.</p>
<p>I agree with SteveMA. My parents have about $10,000 in a custodial account for my son (they have one for each of their grandchildren.) I’ve tapped it to pay for odds and ends, like housing deposits, but S has borrowed for what his scholarships and grants don’t cover. We can always use it to pay down his loans later, or as “seed money” when he graduates … I figure if we can use it for an apartment deposit and a good used car, he’ll only have his loans to deal with starting out.</p>