Should I take out a student loan now?

Paying for College
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<p>I still have two more years of college left and, based off last year's tuition figures, that comes out to a total of ~80K in tuition. Between Vanguard funds, my mom's savings, and my own savings, I can pay at most 70K, which means the last 10K would come from a student loan.</p>

<p>Right now, I'm wondering if I should take out a student loan for ~30K first (roughly the amount I would need to pay off tuition for 2012-2013). I'm not sure how my Vanguard funds will do, given the current economy, but my mom is thinking of transferring the money to a 13 month CD with a 4.5% interest rate so that next year, there'll be another 2K or so.</p>

<p>I know most websites say that students should max out Stafford loans, etc. first. My family situation has been complicated recently, though, and suffice to say I won't be getting a copy of the 2011 tax return any time this summer. I discussed the situation with my school financial aid office and they can't do too much about the situation either.</p>

<p>I've been looking at Discover student loans because you're not required to make payments if you're enrolled in college at least half-time. My mom's planning on co-signing and her credit rating is v. good (720+) so we should be able to qualify for a low rate on the loan.</p>

<p>So, ultimately my question is this - should I use Vanguard funds now to scrape up enough money to cover my 2012-2013 tuition or should I take out a student loan first and use the Vanguard funds (plus gains) my senior year?</p>

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<p>My advice is to use Vanguard funds now. When your parents get 2011 tax return done (by October 15th I assume), fill out FAFSA and request direct loan. The amount of loan should depend on whether or not you think you might have similar situation with tax return next year. </p>

<p>If next year the tax return will be done on time, only request 2.5K loan. If the tax return will not be done on time, request maximum (6.5K) and bank it until next year.</p>

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<p>I probably won’t be getting any information regarding 2011 taxes until next year, if the fact that I received a copy of the 2010 tax return in January of 2012 is anything to go by. Part of my father’s expat package is that the accountants his company hires do his taxes for him, which means my mom and I have no control over the process. 2011 taxes are the last year I have a problem with, though, because my parents are divorced now and I report my mom’s financial information starting from 2012.</p>

<p>What should I do if I can’t fill out the FAFSA and request direct loan?</p>

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<p>Are you sure you got those numbers right? I don’t know of anyplace in the US that’s paying 4.5% on *any *CD, let alone a 13-month one! The average rate is around 1%.</p>

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<p>^^just what I was thinking. Most short term CDs are paying nothing near that. Are you sure the rate isn’t 0.45%? (If your Mom has really found a 13 month CD with a 4.5% interest rate, please share it with me. pretty please)</p>