Quote:
Originally posted by Corneo
I got a question if you don't mind. I am a college student here in California. My projected cost of living in my college town is in the neighbor hood of $14K per year. I am thinking about getting a student loan to pay for my remaining 3 years. How does the interest work because I heard interest does not begin untill I graduate/drop out/ kicked out. Say I took the money and invested it could I pay the loan people back interest free?
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Well, I am no expert when it comes to student loans, but I'll attempt to give you good info anyway
If you get a subsidized loan, interest as well as payments don't begin until you no longer meet the requirements of it being subsidized, such as remaining at a certain GPA, not dropping out, taking full time credits... ect.
If you took the money from the loan and made money with it, you could potentially have the money itself pay for the intererest, so yes, you could pay it back interest free, theoretically.
However, keep in mind that the higher the return, the higher the risk. Unless you make substantially more than the rate you are paying, it would be better to just pay off the loan. Also, keep in mind that if you are planning on making more, there certainly is a chance that you can lose some (depending on the type of investment) If that is the case, you should be prepared to pay it back the old fashioned way.
If you can pay for everything without taking out student loans, I'd recommend doing that, as it will make life after college a lot easier. However, if that is not feasible, do what it takes to get your degee.
I hope that helped, if you have any more questions, please ask!