Using interest free cards to delay using Stafford loans for college

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Location: United States

Postby JoDa » Thu Apr 03, 2014 9:25 pm

While OP could use the money in whatever way they want, and it *could* be more than base tuition, it *is* limited to educational and related expenses. Even $20.5K FOR THE ACADEMIC YEAR doesn't cover the CC bills for the time they could charge it to the card PLUS ongoing expenses. If OP pays their tuition/fees/etc. on the CC for the first half of their education, they CANNOT go back and get a loan for that, only for expenses going forward. That was my main point.

If you don't think you can keep up the full $250 throughout your education, then dark has a point that they will compound interest. If you KNOW you can, then you'll come out ahead.

Also, be wary of the "public service" forgiveness. Unless you are entering a field where you make basically nothing, THIS WILL NOT BENEFIT YOU. You HAVE to be on a 10-year repayment plan, with or without IBR. If your IBR payments would have you paying off the loan in MORE than 10 years, then you will get a TAXABLE write-off of your loans. If, instead, you're entering a higher-income field, you will get NOTHING. I've always made enough in my government job to "afford" my full 10-year student loan payments, so, if I shot for the "forgiveness," I would get nothing. I, instead, pushed my payments out for more years and now pay more to get rid of them earlier than scheduled. Had I gone the "forgiveness" route, I would have been starving and scraping my first few years of employment for NO BENEFIT in the end. By choosing a longer repayment and paying more as I became able to, I can get rid of them *just* as fast, but without struggling for a few years up front. Everyone's situation is different, but do the math to make sure you're not setting yourself up for misery.
CSP $19K
UMP $11.5K
Target Visa $1.5K

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