<p>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:</p>
<p>(1) Savings Account accumulated from the time of my birth $6000
(2) Loan from a federal/private sector (not stafford though)</p>
<p>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).</p>
<p>What else do you need to use that savings for? Textbooks? Travel to and from school? How much money can you make this year with a part-time job on or near campus?</p>
<p>Could you set aside half of your savings for those kinds of expenses and take a loan for say $3000? Would that kind of option make you feel better?</p>
<p>Frankly, while I'm usually all about avoiding loans, I hate to see you burn through all of your savings in one year. I'd prefer that you have a bit of cash on hand for the "unexpected".</p>
<p>Your school loans will have a much better interest rate than many other loans you can get. So, in the scenario that you pay cash for your school and then have to take a loan for an emergency, you'd be worse off. I would have to concur with the other posters; save 2-3 grand in case your car breaks down or something, and use the rest for school.</p>
<p>I'm sure there is a CPA or something like that out here but if the interest from the student loans are deductible then the effective tax rate could be fairly low and it may not be worth expending ready cash. If you are disciplined and can keep that money in the bank for EMERGENCY purposes it might be better to borrow the rather modest sum you are talking about.</p>
<p>A great deal depends on the form of loan. Interest rates may be initially lower but it's an open secret that supplemental fees on SL's are the money maker for the SL companies. Plus many of the consumer protections for other loans are simply unavailable for the SL's. </p>
<p>Additionally depending on the field you're entering the minimal amount of that loan could balloon with only the few deferments...should there be difficulties in finding a posting or unforeseen events. So the 18 months may be a projection rather than a certainty. </p>
<p>In short if you have the money on hand use it rather than accrue debt. SL debt is amongst the least favorable forms of debt in which to become engaged. Especially since you mentioned your families limited resources. </p>
<p>If things do not go as you expect and there are problems...it is a common practice for many SL companies to harass relatives both at home and at work. To the extent that grandmothers and other such vulnerable people have been targeted. And implication that the SL companies and their agents are governmental entities is a common trick which is often used on elderly relatives. And the usual FTC regs about harassment have largely been ignored in regards to the SL people and their proxies. As such little games like repeatedly calling using a 1-888 but not identifying as a means of harassment are not unknown. </p>
<p>The articles posted below are typical, albeit from last year, but there have been no real or substantive changes in addressing these problems. Which may get worse given the general liquidity problems in this 'industry'. </p>
<p>You haven't mentioned whether or not you are receiving financial aid. If you are, it would be best to use as much of your savings as is realistic (ie set aside some for emergencies and any other expenses) Having $6000 in a savings account could significantly reduce any financial aid you may receive.</p>