subsidized loans to invest

Paying for College
1

<p>after calculating how much it would cost me to attend ucsb, i realized i should have enough to completely pay for cost of attendance if i take some work study. thus i would not need to take out loans, but i’m thinking of taking the subsidized loans out and investing them in CD’s. Citi bank is offering 2.25% apr CD’s for 1.5years. it’s not much but it’s still something and when the CD mature i plan on paying back the loan thus i get essentially free money.</p>

<p>is this a good idea? thanks for your inputs</p>

2

<p>I’d venture to guess that if you already have enough resources to pay out of pocket that you won’t qualify for a subsidized loan…only unsubsidized…which would negate any benefit to your plan.</p>

3

<p>If you take the loan and put it in a CD, it will be counted as an asset in your following EFC calculations. This will drive up your EFC and probably negate any benefit as well.</p>

<p>Forward thinking though.</p>