<p>I have a 22k loan cap and I already used 6k of it in my first year. </p>
<p>By eliminating my meal plan, and because of pell grants (3800! woot!) and new reduced EFC (I don't know if I have a new loan cap), I apparently may have up a surplus of 200 without loans, whereas last year I had no pell grants and had to accept all loans and still had to pay on the side. </p>
<p>Should I accept some of the loans since I have a loan cap? Should I just ignore the loan cap in my decision?</p>
<p>Well if my success in financial aid continues for my 3rd and 4th years, then I will be only 6k in debt after I graduate. (It's possible that my loan cap's been lowered. Lemme check.) If I take the loans now, I may hit the loan cap and then get grants afterwards. </p>
<p>(It's too bad I can't use any loans that count towards the loan cap for summer school wahhhh.)</p>
<p>It sounds kinda funny ... but could I take the loans, save or invest them, hit my loan cap 3rd or 4th year, and then just repay my loans immediately after graduation?</p>
<p>Don’t take any loans that don’t absolutely need to pay for your education. Stay smart about money, and continue to live within your means, and you will be way ahead of most of your age peers.</p>
Why not? You *can *use loans for summer school. If you don’t max out during the year then they are available for summer as long as you meet requirements. Also from this school year you may be eligible for additional summer Pell, which is a new thing.</p>
<p>My loan cap is basically something my school sets that if I go over, I won’t have to take out any more loans – I’ll prolly get it covered via grants or something. That is, I won’t ever have to borrow more than 22k (and hopefully reduced EFC gets this lowered).</p>
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<p>Well, I cook, and that makes all the difference. </p>
<p>I make gourmet meals for myself spending on average around 10$/week. I have a part-time job which gives me $150/wk. I’m actually concerned about my income hitting over the $3000 limit before it starts affecting my EFC…
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<p>Well I can get loans, but I won’t get loans-that-count-towards-the-loan-cap loans.</p>
<p>What types of loans are we talking about? Most will say to only take loans when needed because college students tend to spend and spend and rack up debt pretty quickly. Make sure you are disciplined enough to carry out a plan.</p>
<p>I come from a low-income household. I am the most stingiest consumer you can imagine. I will refuse to pay for water even if I am extremely thirsty – unless the nearest oasis is 3 days away or something, I will <em>walk</em> to a place where I can get free water. I cook all my food (or get it for free) and almost never eat out, unless it’s a date or something. </p>
<p>I plan to invest most of it, if I take them… umm… invest in Citigroup stock?</p>
<p>These are Perkins loans and subsidized Stafford loans.</p>
<p>Back in the late '70’s and early '80’s, I knew some people who maxed out their subsidized loans and put them into high-yielding CDs or Money Market checking accounts for future educational needs. I’ve lost track of these folks so I can’t tell you what the ultimate outcome of this was. What I can tell you is that they chose secure investments through their banks, and locked in good interest rates. None of them put their money in the stock market.</p>
<p>The first thing to think about when investing is whether or not this money will affect your FAFSA next year. Roughly 1/3 of the money that you have in an investment will be considered to be available for next year’s EFC. Run the numbers through one of the FAFSA calculators to see what this means for you.</p>
<p>The second issue, would be whether your investment vehicle will earn you more interest than you would be paying on the loan. Be absolutely certain that you won’t LOSE money on the investment. Putting it into the market may not be very smart. Check around at the credit unions and banks near you and find a more secure investment like a CD or a Money Market checking account that pays a decent rate of interest. Some e-banks pay pretty well too. Make certain that the institution is FDIC insured, or has the equivalent Credit Union insurance.</p>
<p>If this money is intended for future education, you could put it into a 529 plan of some sort. Again, you will need to be sure that the investments that are included in that plan are very low risk so that your money doesn’t vanish before you need it. If you are planning to place the loan money into a Roth IRA remember that have to have earned income in order to do this, and don’t forget to check the maximum limit because it changes almost every year.</p>
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