<p>A couple of the schools to which my S has been accepted offer the option to prepay 4 years of tuition at the freshman rate. We would then be protected from any tuition increases, although R and B would go up. For one of the schools, if the tuition goes up at a rate of 5% over the 4 years, that's an extra $10k overall that we would have to pay. We don't have the cash to pay this now, but we could take a 15 year loan. We have to take loans for about half of the tuition anyway, and we were planning on paying half each year. If we do this, we would use this year's cash payment to pay the other child's high school tuition instead of financing, so the monthly payments would be similar. Of course the younger child's tuition payments are for one year at a time, while these payments would last much longer -- part of the plan is that I would eventually get a full time (instead of part time) job to repay these loans before retirement. Any thoughts?</p>
<p>My only thoughts are....what happens if you prepay and your child leaves the school before graduating for any reason? Would you get money back? How much? Look at the interest rates on your loans. If they are 5% you really aren't gaining anything by taking out loans....you'd be paying the difference in loan interest. Honestly, I don't think that taking out a loan to finance four years up front is worthwhile...but I'm certainly going to read the other responses on this thread to see what others think!!</p>
<p>Never mind! I pulled out my calculator and it doesn't work to our advantage. The interest for the 4 years in college is about $23k and the expected tuition increase is about $10k. I guess there's just no easy way!</p>