To accept loan or not?

Paying for College
1

Hi all

I’m a long-time CC lurker and very appreciative of all the great advice I’ve picked up over the years.

I’m trying to advise my daughter whether to accept an unsubsidized student loan or not. She requested it in the first place because she was hoping to use the funds for an overseas trip with one of her student activities over winter break. Unfortunately, her trip may have fallen through, and we don’t need the loan to cover tuition or living expenses.

The question is whether it’s beneficial to her credit score to keep the loan for a short time and repay. Or alternatively, she could just decline without taking the disbursement. To take the loan there would be an initiation fee, and interest would accrue (since it’s unsubsidized), so the benefit would have to outweigh the costs. I’m inclined to tell her not to accept the money, but wanted to see if anyone had advice.

Thanks!

2

Solely for the purpose of boosting her credit score? Not worth it, in my opinion.

3

Do not take the loan if no needed.

4

Decline it now and if she needs it during the school year she can request it again. Her credit score will not be helped by a $1000 short term loan.