Should I take a subsidized loan?

Paying for College
1

Hi all!

Thus far in my college life, I have been able to pay for classes up front in full (community college is partially responsible for that). I’ve calculated that with my current job, my parents help, and the money I’ve saved by going to a CC, I will be able to barely pay for my bachelors degree without having to take out a loan. But now I’m wondering if I am making a mistake by not taking the loans they’re offering (excluding grants). After filing out my FAFSA for this year, I was determined to be qualified for the direct subsidized & unsubsidized loan. Would taking the subsidized loan be a good idea since interest doesn’t incur for me until I graduate? I am aware of the origination fee, but I’ve thought about taking the money being saved for college (would basically pay for my bachelors), and put that into a high interest CD (Highest I’ve seen so far is 1.14%). Then use the subsidized loan to pay for school/extra spending money. Would you recommend this (Or taking the loan at all)?

2

If you have to scrimp a great deal to make it without the loan, I would take it. It will offer a risk buffer. I doubt you’ll be able to make back the origination fee with the rates right now so don’t use that as a reason.

3

My D is taking her sub loan this year and saving it for grad school.

We are keeping it in a separate account so we can exclude it from having to be reported as part of student assets on the FAFSA.

I will keep her financial aid statement from the school showing that she was issued that exact amount as a loan refund. So I can prove that this money is financial aid and doesn’t have to be reported as student asset on FAFSA.