/ Ask Terry Questions / College Loan or private pay?

College Loan or private pay?

By Terry Savage on April 19, 2021 | College Savings / Student Loans

Dear Terry,
We have roughly saved enough money for our daughters college fund, but the majority of the college fund is in two stocks. One of the stocks has done very well and earned a 27% return last year.
We have various other savings of smaller amounts in Bright Start.
My question is…I was thinking of getting a loan for college and letting the interest continue to accrue and then paying off the loan in full when she graduates. I have completed the FAFSA form and we are not eligible for any monetary amounts.
She is going to U of I in Urbana.
Any suggestions would be greatly appreciated about what to do concerning loans or your opinion about how to proceed.

Terry Says

In my mind, that is a HUGE risk! Personally, I’d feel terrible if I let a college education slip through my grasp in the stock market! Who knows what will happen with the market, much less just two stocks. I’d sell now, pay the taxes, and put the money in Treasury bills at TreasuryDirect.gov. (In fact, that’s what I did with my son’s college fund years ago when I realized I had “enough”! But it’s up to you.



a personal
finance question