Plus loans vs home equity/mortgage loans

bluebayou
Sun, 25 Apr 2010 12:48:56 +0000

Two other perhaps considerations to add to calmom’s excellent analysis:

1) The deduct-ability of PLUS loan interest is subject to a phase-out, based on AGI.

2) You don’t need to borrow all the funds on Day 1 for the school year. Colleges only bill you by term, either semester or quarter, so you could take out separate loans by term. For example you could borrow $15k on a PLUS in August for the first semester, and then wait until late Dec for the second loan for semester #2. If on the quarter system, you could borrow $10k in Sept, $10k in Dec and $10k in March. (This will reduce your payments for the first xx months in Year 1.)