We will be able to spend up to $150000 for our son’s college costs. Hopefully, he will attend a college where this is sufficient…however, he is considering several schools which would involve him taking out loans amounting to about $60,000. I am wondering what the best way is to pay? Do we spend down all our savings and then have him take out the $60,000 all at once for the last year? I am wondering if this is best as it minimizes interest costs. Or do we have him take the max each year that he can do on his own (5.5 k then 6.5 k etc) and a larger loan the last year. Just looking for suggestions on strategy to minimize the total cost of these loans. Also, advice as to which loans/lenders we should be looking at to accomplish this.
Nobody is lending a 21 year old 60,000 so this question is moot.
The real question is that after your son has maxed out on HIS loans, how much can you realistically afford to borrow without risking your own financial future? And if the answer is zero (as it is for many people) then you know what your son needs to do- find colleges where the 150K plus his own borrowing comprises his college budget.
Your son can only borrow ~$5500/year, so if you can pay $35k/year, his budget is ~$40k unless he can get merit aid. Any additional loans would be in your name, not his. I don’t think it’s necessary to spend ~$210k+ on college, especially when a 1/3 of it is from loans.