<p>I'm an upcoming freshman at state flagship university and all of my scholarship and FA adds up to a little over 22K for the year. They estimated that I need 24K due to other expenses (e.g. travel and miscellaneous) and settled the difference with about 2K in a fed subsidized loan. Realistically, in order to pay tuition and room/board, I don't need anywhere near 24K and am completely capable of covering all costs with what they've given me thus far.</p>
<p>Should I take out the loan just in case? In a way, it feels like it doesn't matter; I would only spend it if I absolutely needed it. The lack of interest makes me think that this is a reasonable decision, but I'm sure there is something I'm missing.</p>
<p>I'm pretty ignorant and I would be glad to hear your advice. :)</p>
<p>
Yes If you don’t need the loans, just put them in the bank.</p>
<p>I’d like to, but I have yet to find any good resources that explain the process. I’m particularly apprehensive because my family is like $100K+ in debt.</p>
<p>Do the feds just pay off the interest that accrues or is there simply no interest at all? Excuse my limited knowledge of economics (lol).</p>
<p>Be aware that if you take out the loan, not needing it, it can easily disappear for things you don’t need. There is a certain discipline in not spending available money. I know too many people, myself included, who have splurged just because the money is there. </p>
<p>The reason it’s a good deal to take the subsidized loan is because it can be a bird in hand. You may need money later and not be able to get all you need on a subsidized or even an unsubsidized basis because the amount are fixed as to what you can get each year. You don’t take your freshman year entitlement and need more than your sophomore or future year amounts, you are out of luck. You can keep the money in an interest bearing account and not have the amount affecting your financial aid since you can subtract it out of your assets. It can be a nice cushion for you, the reserve you keep just in case. Not much interest you will be getting with rates the way they are, but hey, even a little bit is nice. And if you pay it all back when you are no longer full time, you don’t owe any interest. </p>
<p>But, as I started out saying, it also means a certain discipline is needed or you can end up spending money you would not have, and a loan needs to be repaid WITH INTERESt in time.</p>
<p>Thank you all for your help. </p>
<p>@cptofthehouse I completely agree with everything you said regarding the itch to spend. I was raised with limited means so frugality comes naturally to me. Though I’m probably pretty financially clueless compared to people raised in middle class families, I think I am reasonably reliable, but do I really trust myself to save the money when I’ve never had that much money to spend before? I do, but so does everyone else before they screw themselves over. 
I’ll just have to think about it.</p>
<p>Again, thank you to all! </p>
<p>If your thinking about grad school, and you can keep from spending it frivously, you should take the loans,</p>
<p>I have thought about that. Then again, what good is $2K going to do when I’m paying $55K annually for grad school? -_- Especially considering that, from what I understanding, grad schools don’t offer need-based aid.</p>
<p>Every dollar can count, IMO. More importantly, when you are living close to the edge financially, emergencies can really set you back. That not having a financial buffer can make one of those things that just happen into a true crisis. Things like breaking a tooth and being in excrutiating pain, losing ones glasses, a car accident, a robbery, some mishap or other. $2K buffer can make a big difference.</p>
<p>It’s two grand this year and probably next year and the next. Applications can run $100 each. You may need transportation money for interviews. You’ll have moving expenses. This money can be there when you need it and reduce a lot of the stress, especially since your family can’t help out much. If you end up not needing it, you can pay the loans off after graduation without having any interest charged. </p>
<p>I went ahead and took it out. If this decision comes back to bite me, I suppose it will just be one of life’s lessons. </p>
<p>Thank you guys!</p>
<p>For grad school in some subjects, they pay you.</p>