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Another point of consideration; what would your living expense (rent) be while in college ?
The way I see it, money paid to a landlord is money sent into oblivion, never to return. Money put into a house, even with a high interest rate, still has SOME going toward equity. You still KEEP the money, just in a less liquid form. If you pay off school, renting your living quarters the whole time, that is 4-8 years worth of rent money down the drain, you STILL spent the money on school, and you STILL have to put the same money into the house later. That is all assuming you get a house right out of school, which, likely won't happen since you no longer have money for a down payment. So you will still be paying rent WHILE saving for a downpayment in the future.
If you use the money for a down payment, and get college loans for the degree, you will live, essentially, rent-free the entire time. Also, college loans are notoriously lower interest rate than home loans if you get a Stafford loan, or something like a Sallie Mae loan (Unless you qualify for a HUD loan, which I doubt since you have a $60,000 down payment).
All-in-all, the house, and college will cost the same amount no matter when you apply the money to them. You buy the house for $250,000 after interest or whatever... it'll cost the same now or later. Same with the college loan. The difference isn't as much in which has higher interest, it's in how much cash you are paying during the time you have no house.
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