Hi,
I'm a long time lurker and a big fan of this site!
I am about to invest 210k in a professional education(bad decision, I know, since I had other less expensive options, but I am convinced this is the right move for me). I will greatly appreciate your opinions on the financing options we are considering. Please share any other options you think we should consider as well. It's kind of scary/funny that I am getting into debt while others are trying to get out :-0
-Federal student loans for the full cost: The advantage of federal loans is they get forgiven if I die prematurely. I am comfortable with this option because I don't want to leave my husband with such a huge liability. The disadvantage of federal loans is the interest rates are enormous(about 60k will have an interest rate of 6.8% and 90k will have an interest rate of 8.5%).
-A mix of federal student loans and savings: We could probably use about 120k(40k a year to be saved during the next three years) of our savings and take out 90k in federal loans(about 60k at 6.8% and 30k at 8.8%). The disadvantage with this option is that if I die without using the degree, my husband would lose 120k in savings(money we plan on saving for a new house after I graduate from school). I was considering this as a cheaper option if we could find some life insurance to cover the used savings in case I die prematurely, but I have very limited knowledge on the reliability of life insurances(the student loans will almost certainly be forgiven if I die; will the life insurance be almost certainly be paid out to my husband if I die?)
-A home equity loan or line of credit: I still have a lot of research to cover on this option, but the interest here should be cheaper than the interest on student loans. We fully own a small house worth about 150k. Again, this option requires life insurance on me.
Other than this 210k, we have no debt, and I plan to work during the summers to either reduce the loan amount or cover babysitting if we have a child in the years while I am at school. With my husband's salary, we plan to save about 10k in his TSP account while I am in school and to save 35k a year towards a new house we plan to get when I finish school. Besides the planned future savings of 35k a year, we have a year's worth of my husband's salary in checking accounts and CDs for emergencies.
Thanks for your help!
I'm a long time lurker and a big fan of this site!
I am about to invest 210k in a professional education(bad decision, I know, since I had other less expensive options, but I am convinced this is the right move for me). I will greatly appreciate your opinions on the financing options we are considering. Please share any other options you think we should consider as well. It's kind of scary/funny that I am getting into debt while others are trying to get out :-0
-Federal student loans for the full cost: The advantage of federal loans is they get forgiven if I die prematurely. I am comfortable with this option because I don't want to leave my husband with such a huge liability. The disadvantage of federal loans is the interest rates are enormous(about 60k will have an interest rate of 6.8% and 90k will have an interest rate of 8.5%).
-A mix of federal student loans and savings: We could probably use about 120k(40k a year to be saved during the next three years) of our savings and take out 90k in federal loans(about 60k at 6.8% and 30k at 8.8%). The disadvantage with this option is that if I die without using the degree, my husband would lose 120k in savings(money we plan on saving for a new house after I graduate from school). I was considering this as a cheaper option if we could find some life insurance to cover the used savings in case I die prematurely, but I have very limited knowledge on the reliability of life insurances(the student loans will almost certainly be forgiven if I die; will the life insurance be almost certainly be paid out to my husband if I die?)
-A home equity loan or line of credit: I still have a lot of research to cover on this option, but the interest here should be cheaper than the interest on student loans. We fully own a small house worth about 150k. Again, this option requires life insurance on me.
Other than this 210k, we have no debt, and I plan to work during the summers to either reduce the loan amount or cover babysitting if we have a child in the years while I am at school. With my husband's salary, we plan to save about 10k in his TSP account while I am in school and to save 35k a year towards a new house we plan to get when I finish school. Besides the planned future savings of 35k a year, we have a year's worth of my husband's salary in checking accounts and CDs for emergencies.
Thanks for your help!