If D1 takes the $5500 unsubsidized loans she is offered but pays them off as soon as she graduates, I wonder how I would calculate the loan cost? Does interest start immediately or not? We weren’t really planning letting D1 take any loans, but if money is invested now and doing well, and loan rates are truly low, would it make sense to take money now and pay off as soon as she graduates?
6.8% interest begins accruing immediately.
Here is one good calculator you could try: http://www.finaid.org/calculators/loanpayments.phtml
If you find an investment with a guaranteed return that does better than 6.8% plus the loan origination fee, please let me know.
If your daughter is an undergraduate student, the interest rates are actually at 4.66% for the 2015-2016 school year, subject to change soon depending on what legislation decides.
@Middkid86 I would tell you but then I would have to kill you.