Young Cadet -Career Starter Loan

[MarieIG]

The loan the OP is referencing is known as the "cow loan" in USMA vernacular. In 2007, my son, who was a "cow" (a junior) at the time, used the proceeds to do the following: (1) buy his class ring (at West Point, this is a really big deal); (2) take a great, well-earned vacation with other cadets on Spring Break of his firstie (senior) year; and (3) fund his 2LT uniforms and the expenses of his first duty assignment. It also allowed him to build credit as he started "adulting" and "Army-officering."

We bought DS the ring as a graduation present.

 

[SnowballCamper]

In the month of graduation she will need to purchase a complete set of uniforms which is likely over $2,000 today. The first several months she will be on a temporary assignment to the officer basic course and other training requirements and will incur substantial out of pocket expenses for this travel (think hotel rates for several months--hopefully reimbursed with a couple months from the start, but not always). They will be reimbursed by the Army, but the process can take a while. Once she completes the basic course and other training she'll have to travel to her permanent duty station, and secure an apartment to live in (deposit and first and last months rent). Then she could probably borrow a cot and live out of a duffel bag, but surely doesn't want to live that way. She'd like some furniture, plates and flatware, pots and pans, etc.

Even if she did all this on the cheap, and got reimbursed in the Army's *timely* manner (a couple months) it easily adds up to $10,000 that she presumably doesn't have in the bank. This starter loan at sub 5% interest provides flexibility at a rate better than any other option. I'd keep it in cash so that when the pay starts the deductions for IRA and TSP can be put on autopilot at their maximums.

It isn't optimal to start life with any debt, but she is way ahead with zero education loans and a guaranteed job for the first five years.

 

[ncbill]

My kid didn't take the loan, but we gave him a newer vehicle, just off-lease.

He also has always roomed with others...right now paying $600/month for a room/bath in an old classmate's house.

Male or female, IMHO junior officers should be sharing housing & saving as much as possible of their tax-free BAH.

This summer he'll move out of there but still will be sharing costs...with his new spouse.

 

[MarieIG]

My kid didn't take the loan, but we gave him a newer vehicle, just off-lease.

He also has always roomed with others...right now paying $600/month for a room/bath in an old classmate's house.

Male or female, IMHO junior officers should be sharing housing & saving as much as possible of their tax-free BAH.

This summer he'll move out of there but still will be sharing costs...with his new spouse.

I would have given the kiddo a used vehicle (as we did not supplement college costs), but he didn't need it. Spouse came with her own (used but reliable) vehicle.

 

[Gumby]

I had roommates from the time I graduated from USNA until I got married almost three years later. And then my young wife lived with my last roommate for a few months while I was deployed immediately following our wedding. When I got back, she and I got our own apartment.