<p>legendofmax - I also think your borrowing is a good idea. If there is an attorney handling the estate, perhaps he/she would do it for a nominal cost. Also you can find generic contracts on line. Also Nolo press might still have books out there - they have always offered simple legal procedures/contracts for "do-it-yourself"ers. What you are looking for is a "promissory note." It can be very short. I will try and find one and post a link; otherwise Google promissory note. You should have this written agreement for many reasons - IRS, family relations, two different people not remembering different things, etc.</p>
<p>Here is one link (google brings up quite a few). They have the contracts organized by state, so that you will be in compliance with your own state's requirements:
<a href="http://www.ilrg.com/forms/promisry.html%5B/url%5D">www.ilrg.com/forms/promisry.html</a></p>
<p>This idea is a win/win for your mother because, as you say, you can agree on an interest rate which is better than what she can get in a bank. For you, it's a good place to borrow from; for her, it helps her get the maximum income to use for her own living expenses.</p>
<p>Of course, you will still want to get as much grant/scholarship money as you can over the years to minimize your debt.</p>