Student Loans

[AZN_ZX2]

So my parents accidentally took out $46,000 in loans. I only need $23,000 for school. Now they give me the option of having the excess deposited into my bank account and using it for books, and school related supplies. I was told that if I use say $300 for an exhaust, it would be considered money laundering.

I had planned on using $4,000 for rent, $1,000 for groceries, $1,200 for books, and if it's legal $1,800 to pay off the car, and invest the rest in bonds.

Now I am pretty sure for books and rent it is legal. For groceries and paying off the car is that legal?

[JonsZX2SR]

Probably the best thing to do would be to contact the lender and see if the balance can be returned. The last thing you want to do is squander that money and have an extra $23K to may off after graduation. By returning it you avoid temptation. I would also have it moved to your bank account so the parents aren't tempted either.

Another option would be to invest in a fixed income, then use it for future tuition, room and board expenses instead of taking another loan. I assume it is interest free while you are in school.

The problem with investing in stocks or mutual funds at this time is there is a possibility the investments will lose money. It is a risk you take.

[ZX2 Sleeper]

hey Matt, bestfriend buddy... Can you help me jump start my turbo build? lol. I need the Money!

anyway, I would try and get the funds returned. If you don't, that's twice as long your parents/you have to pay it back. Plus I can see you buying everything and anything.

[AZN_ZX2]

Well I am definitely going to use $4,000 for rent and $1,200 for books, but aren't bonds a very safe investment? Or is a bond a type of mutual fund? I'm not good with this stuff sorry.

If I can't use it I am planning on returning it, and it will roll over to next year.

Nick, when I'm rich I'll hook ya up lol

[ZX2 Sleeper]

I think bonds take longer to mature now then they did a few years ago.

[SoCalZX2]

Bonds are a "safer" lower risk investment, but they fluctuate a lot based on interest rates. If you're looking for a place to keep the money where it's gaining some interest, but not a chance of losing the principle on it, you could use a high yield savings account from a place like ING.

[AZN_ZX2]

Is it legal to use my extra loan money for something non school related?

[SoCalZX2]

Thats like Jon said... You'd have to talk with the lender about. I don't have a clue on that...

[AZN_ZX2]

Ok thanks everyone.

[PHeller]

wow...and I was worried about what I'd do with $3500 in excess school loans. I just lowered my borrowing amount.

$3500 a Semester Tuition FTW.

[AZN_ZX2]

Yeah I regret not staying at community college

[DJ12inches]

Dont worry about using the money. You can buy whatever you want with it. They are just going to deposit funds, and you have to pay them back eventually. The interest will be subsidized on some loans, not on others, so check. Dont take the unsubsidized loans, or you will acrue interest on them, and then it's pointless to put the money into a CD or something. If the loans are subsidized, however, you can use the extra cash to earn interest, but since the investments will be rather short term, you wont see much in the way of returns. You can take a risk by playing the stock market, and it may pay off a bit more if you know what you are doing. Whatever you do, however, I dont think that you want to just "give it back" if the loans are subsidized while you are in school. At least drop the cash into a savings account that bears some interest. There used to be online savings accounts that would pay up to 5%. Then, if there is some emergency, at least you have the cash stored away.

JB

[PHeller]

Yeah I regret not staying at community college

I'm not going to a community college. I was, and it was equally expensive. At Harrisburg Area Community College I was paying $3500 for 17 credits.

Bloomsburg
California
Cheyney
Clarion
East Stroudsburg
Edinboro
Indiana
Kutztown
Lock Haven
Mansfield
Millersville
Shippensburg
Slippery Rock
West Chester

All with the exception of West Chester, Slippery Rock, and Bloomsburg run around the same $3500-$4500 a semester 15-18 credit tuition.

These are full blown Universities, where you actually get your money's worth.

My buddy went to a private school in Delaware (Wesley College) and has racked up nearly 100k in debt. He might not even get a degree from them.

Moral of the story, be wise about where your going to school and why. Remember, education can be as excessive as buying an un-needed SUV, big screen tv, or McMansion.