FAFSA Help...

andrewpete93

Question - got approved for the full amount (20,500) but am now living with my parents for law school (1L year at least). I only need about 7k to cover first year costs. Stupid questions:

• I have enough saved up to cover my 1L costs without taking out any loans this year. Would you take out the 7k and then invest the savings or just pay for it to come out of the first year debt free?

• Is the FAFSA year by year or could I take out the full 20,500 now to cover the next couple of years?

Any help or resources you could direct me to is appreciated. Thanks!

Leah M B

Personally no, I would not take out the loan and invest savings. Your loan will be accruing interest during school, so you'll likely end up with net negative. I wouldn't take out the loan and would pay for my expenses out of savings.

It is yearly and again, as the loans will be accruing interest, I would not take out all the money up front.

LivingThatLSATdream

Do not take out any unnecessary loans. The only way it may make sense is if the loan is subsidized, which I don't believe grad school loans are. I have a 5500 undergraduate loan that was subsidized and 3.5%.... I got the loan in 2011 (I think) and total interest has been less than $150. Still totally stupid that I have that loan and that I haven't paid it off in 7 years.

If you can avoid student loans absolutely do so until necessary.

AudaciousRed

If you don't need it, don't take it. Student loans are really unlike any other kind of loan, save maybe credit cards. They are unique in how they build interest. It's not worth having it on hand to "save".