<p>I am a grad student and have been awarded subsidized and unsubsidized stafford direct loans for next year. </p>
<p>I have a job for the fall semester that includes a tuition waiver (it also includes a stipend that--along with savings and another job--will cover my other expenses), so I only want to borrow money to pay the spring semester tuition.</p>
<p>Does anyone know if I can have all my direct loans disbursed in a single payment at the start of the spring semester? </p>
<p>If that's not possible, does anyone have suggestions about what I can do instead? I've thought about having half disbursed in the fall (as the award letter states) and either leaving it as a credit on my account or having it disbursed to me so I can save it for the spring. It won't accrue interest until I graduate, so I'm not worried about that, but I am worried that I'll run into issues with it not being considered to have paid for a qualified expense, and then having problems deducting my loan payments from my taxes in years to come. </p>
<p>I am trying to get in touch with the financial aid office to sort this out (and won't accept the loans until I do!) but thought I'd throw this out there for any advice people have. Thanks!</p>
<p>I would go the route of having the fall payment disbursed to you in the fall. Qualified education expenses for loans are much broader than for say the hope tax credit that includes only tuition/fees/books. Education loans can be used for anything included in the schools COA - tution/fees/books/room and board/travel (up to the amounts in the COA for the last 2). So as long as your total tuition waiver/loans etc does not exceed the COA for the semester you should have no problem using the loans for a tax deduction in fuure years.</p>
<p>IRS publication 970 has detailed information on education tax breaks and has the specific rules for calculating student loan deductions</p>
<p>Thanks for the prompt reply! Unfortunately for this situation, I am in a grad program that has high tuition and is in a relatively inexpensive part of the country. So the fall disbursement would be significantly more than my actual expenses for room & board, books, etc. (especially because health care is also covered by my job) or the COA established by the school.</p>
<p>I'll wait to hear back from the financial aid office and will post when I get a response, in case other people are interested in the results. Worst case scenario is that a few thousand dollars of loans aren't tax-deductible...I guess, in light of the whole cost of attendance, it's not a huge deal.</p>
<p>Take the loans. The loans will be disbursed equally by semester/quarter. Your delay of the fall disbursement amounts to 4 months, although the interest is something to consider, the interest on this disbursement will be fairly small. What we have found in wages from a job, stipends, TA/RA is that the school and employers are not always as prompt has you would like them to be. </p>
<p>Rule of thumb: Having cash is always better than the promise of cash. thus, take the loan, save your earnings for the second semester or emergency. If you find that you have enough earnings for the second semester, then can decline or reduce the second part of the loans. </p>
<p>We did have the undergrad stafford bank pay a single payment for the Spring semester. It is not difficult but will be confusing and extraordinary. Basically we delayed FAFSA and other income verification until after fall payment due. We paid-in-full fall semester out of pocket. I do not recommend this method incase of a misunderstanding.</p>
<p>If all of your actual cost of will be covered without the loans, I would recommend only taking the Subsidized portion out in the fall and then both sub and unsub during the spring, when you truly need the money. The Unsub amount accrues interest upon disbursement...which at graduate levels can rack up a large amount of unnecessary interest. Talking with your FA counselor, this shouldn't be too difficult to accomplish.</p>