<p>Ok, so I got a finaid package from Willamette. 38k total costs, but 10k in grants bring the cost to 28k. I have 10k saved and can make 8k a year. So we don't need THAT much in loans- maybe like 10k/year. The school offered 25 grand in loans, and my dad accepted it all. His reasoning? Even if we end up not needing it, interest and loan fees are worth it just to know that I will have enough $ for college. Does this make sense? I'm worried that he's in over his head- that is $100,000 in loans for 4 years.</p>
<p>If your father banks it, it will be assessed next year for financial aid at 5.6%, and may reduce your grants. If he needs the money for debts and this is his best deal, that is one thing, but if he turns it into an asset, it can be a problem.</p>
<p>Willamette pays the interest on their loans for you I believe so they are interest free loans until 6 months after you graduate. That is amazing. I was rooting for Willamette for my D but she decided to stay closer to home. Check on that as they have a special program that is quite unusual in addition to the sub loans the gov has</p>
<p>Home Town Question.
Makes sense. That's the way we do it, although we have 100% EFC. The reasons are: </p>
<p>There is no guarantee that you will or can make $8k per year-you may want to do an internship or study abroad. </p>
<p>There is no guarantee that your parents are able to pay the $10k as out of pocket costs.</p>
<p>The loan is disbursed in two payments (semester), so $12.5k loan is applied in the fall and another $12.5k in Jan-IF you want it, your option. You can also take both portions and refund back to the lender any amount you do not need without penalty (there is a time limitation-check exact conditions with lender)</p>
<p>Student loans in the past 3 years have been cheaper than that of a refi/equity home loan and with less hassles. While investments have increased faster than the interest on loans. The future may and probably will be different. </p>
<p>Being able to get a loan is much better than NOT being able to get a loan when you really, really need it. </p>
<p>Interest on student loans is tax deduction from income. If your parent's marginal tax bracket is close to 30%, then a student loan interest rate of ~6%, really has an effective cost of ~4%. Can you or parents find a tax free savings-investment that pays > 4% ? </p>
<p>Better Cash flow management in the family budget. </p>
<p>Do not make the assumption that there will be $100,000 in debt after 4 years, too many variables in life. That's a long time, infact ~25% of your lifetime by the time you graduate but less than 10% at my age and when our kid started college.</p>
<p>There are other emotional and logical reasons that you can discover.
Appreciate your concern. Don't let him down on his investment on you.</p>
<p>Goodluck.</p>