Home

Student loans, Mortgage Advice
Previous  1, 2
 
Post new topic   Reply to topic    Forum -> Household Management -> Finances

View latest: 24h 48h 72h


aliavi




 
 
 


Post  Sun, Feb 10 2019, 6:54 pm
Amarante wrote:
If your question is whether to spend savings for tuition or to take out a student loan, I would take out a student loan.

This is because the interest while attending school is minimal and interest on student loans is deductible up to $2500.

If you use a loan to pay off tuition, you will have your savings at the end of graduation and you can assess your financial situation at that point. You can use the money to pay off the loans entirely or just use it to pay off a bit faster or pay off monthly and use the money for something else.

Once you have used up your savings, amassing that amount would be difficult. The amount paid in interest if you decide to repay loan quickly and use up your savings after graduation is minimal versus the flexibility you would have with the savings intact and the peace of mind having that amount in savings.

Borrowing to cover tuition is not a bad economic decision so long as attending the school makes economic sense. Attending a mediocre college versus a free or inexpensive state school makes no sense. Borrowing money for a commercial college like Trump University LOL makes no sense. Borrowing for a professional school like med school makes economic sense etc.


I respectfully disagree completely with nearly everything you have posted. It’s a recipe for foreclosure or bankruptcy and a whole lot of stress and juggling.
Back to top

Amarante




 
 
 


Post  Sun, Feb 10 2019, 7:17 pm
aliavi wrote:
I respectfully disagree completely with nearly everything you have posted. It’s a recipe for foreclosure or bankruptcy and a whole lot of stress and juggling.


Disagreement is fine but why don't you explain your points of disagreement.

I am doing much the same thing in terms of deliberately not paying off my current mortgage even though I have more than enough to pay it off.

So long as the OP is fiscally responsible how is this a recipe for foreclosure or bankruptcy.

There is no house purchased so there can be no foreclosure. Presumably when the person has graduated they can evaluate their economic situation including any loan burdens and determine whether to purchase a house or if so, what house is affordable.

I also don't understand how one can bankrupt oneself so long as one isn't living beyond one's means. In the situation stated, the OP always maintains their savings and takes out loans while attending school. At graduation, they then have the ability to pay it off completely.

Now if someone is a financial wastrel and would dissipate their savings while going to school so that there was no savings PLUS student loans, the analysis would be different.
Back to top

amother




Goldenrod


Post  Sun, Feb 10 2019, 9:18 pm
Amarante wrote:
If your question is whether to spend savings for tuition or to take out a student loan, I would take out a student loan.

This is because the interest while attending school is minimal and interest on student loans is deductible up to $2500.

If you use a loan to pay off tuition, you will have your savings at the end of graduation and you can assess your financial situation at that point. You can use the money to pay off the loans entirely or just use it to pay off a bit faster or pay off monthly and use the money for something else.

Once you have used up your savings, amassing that amount would be difficult. The amount paid in interest if you decide to repay loan quickly and use up your savings after graduation is minimal versus the flexibility you would have with the savings intact and the peace of mind having that amount in savings.

Borrowing to cover tuition is not a bad economic decision so long as attending the school makes economic sense. Attending a mediocre college versus a free or inexpensive state school makes no sense. Borrowing money for a commercial college like Trump University LOL makes no sense. Borrowing for a professional school like med school makes economic sense etc.


Thanks for breaking it down.
One more scenario then: instead of putting away into savings every month, is it worth paying tuition to minimize the student loans? (This is separate than the aforementioned savings - I mean instead of accumulating savings during the 4 yrs, taking that money and putting it towards tuition. Ex if you have the option of saving 10k a year or Putting it towards tuition)
Back to top

amother




Purple


Post  Tue, Feb 12 2019, 6:53 am
amother wrote:
Thanks for breaking it down.
One more scenario then: instead of putting away into savings every month, is it worth paying tuition to minimize the student loans? (This is separate than the aforementioned savings - I mean instead of accumulating savings during the 4 yrs, taking that money and putting it towards tuition. Ex if you have the option of saving 10k a year or Putting it towards tuition)


You should put that money toward tuition not savings because interest on those loans will be higher than what you would get if you saved. I would not take out loans if you have savings. As a side note the loan repayment is a lot more than a few hundred dollars a month for 250K, it's probably about 3000 a month for 10 years or about 1800 a month for 25 years. (or higher). As for buying a house, it depends on the cost of rental vs buying like someone explained earlier.
If you or dh is thinking of going to medical school, I'd strongly recommend rethinking it--talk to physicians today and get an idea of what it's like today. Usually not worth it given the time and money you put in.
Back to top
Previous  1, 2 Recent Topics

Page 2 of 2 View latest: 24h 48h 72h


Post new topic   Reply to topic    Forum -> Household Management -> Finances

Related Topics Replies Last Post
Freezing advice....
by amother
4 Sun, Apr 14 2019, 7:30 am View last post
Long plane trip, stopover, no food - advice?!
by amother
31 Fri, Apr 12 2019, 2:29 am View last post
Mortgage broker in Baltimore?
by amother
13 Sun, Apr 07 2019, 8:36 am View last post
Hanging Family Pictures Advice
by amother
9 Wed, Apr 03 2019, 3:36 pm View last post
Advice/support? Third child 15 months apart
by amother
17 Wed, Apr 03 2019, 10:07 am View last post

Jump to: